National Pawnbroker Winter 2017

Pawnbroker National

Official Publication of the National Pawnbrokers Association

WINTER 2017

Beauty or Beast?

Determining Handbag Authenticity Plus: LinkedIn: Recruiting Tool Dressing the Part

Celebrating 30 Year s

message from the president

Reflections and Reassessments

Tim Collier NPA President

With the holidays upon us, it’s a good time to reflect on the things we have to be thankful for. So often, with a never-ending rush to finish things in life and work, we don’t take the time to really stop and smell the roses. As we get older, there’s one thing we can all agree on – life is short. When friends and relatives succumb to health problems, we tend to appreciate all that we have more and more. It’s the same in the business world. When business acquaintances and friends suffer through financial hardship, we have to take a mental inventory to make sure these same situations don’t happen to us.

With the release of the Small Dollar Rule by the Consumer Financial Protection Bureau (CFPB) back in October, we assumed the payday loan industry would end as we know it. The CFPB’s rule requires lenders to determine up front if consumers can afford to repay their loans. This will, undoubtedly, force the traditional payday model to adjust to another type of lending in order to survive. Fortunately, the NPA, along with its government relations committee, has been working on this for quite some time by submitting comments to the CFPB on why pawn should be exempt from this rule. It paid off in grand fashion with the exemption. “The rule excludes or exempts several types of consumer credit, including (5) non-recourse pawn loans”.

While we can be thankful that traditional pawn transactions were exempt from the Small Dollar Rule, we must keep fighting the battles that never seem to go away. A new round of bank discontinuance prompted pawnbrokers from coast to coast to seek new banking relationships after decades of uninterrupted banking service. Most alarming was this came after the Department of Justice’s official announcement that “Operation Chokepoint” had come to an end. After meeting with officials from the Office of the Comptroller of the Currency (OCC) and Federal Deposit Insurance Corporation (FDIC) last year, we were told pawnbrokers might want to seek out regional banks to avoid a loss of banking services by larger national banks who didn’t want the compliance costs involved based on the profitability, or lack thereof, from our accounts. Because the pawn business is a cash intensive business and banks are being asked by regulators to not only know their customers and their customers’ customers, banks are choosing the path of least resistance. That path is to end longstanding relationships with pawnbrokers to avoid the compliance issues.

The NPA has assembled a strong team of consultants whose entire focus is staying on top of legislative and agency threats to the industry and its members individually. Our team, along with a network of pawnbrokers from across the country, has been converging on Washington, DC, for the past 15-plus years, and has created lasting relationships. I am grateful for the caring folks who work for the pawn industry and work to protect our livelihoods. If it weren’t for the (Continued on page 59)

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National Pawnbrokers Association

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contents WINTER 2017

Cover Story

Beauty or Beast?

Page 34

42

Contributors for this issue of National Pawnbroker

HIGHLIGHTS

Member Benefits

Winning at the Employment Game 21

Maximize Your Membership

26

28

What Are the Pawn Laws In…

56

42

Member News

LinkedIn: Recruiting Solutions

16

Bringing In the Cash Dressing the Part

IN THIS ISSUE Message from the President

1

Message from the Executive Director

4

Increases Marketing

22

A Guide to Grading Diamonds

Set in Jewelry

32

Does Your Business Have

an Identity Crisis?

59

State Association Updates

60

Diamond Trade

New NPA Members

Member Spotlights

Business Solutions

39

Young Pawnbroker to Watch

Pawnbroker

10

Industry Partner

14

Behind the Scenes

Should You Get Certified?

NICS E-Check Recent Changes

50

AML Compliance Course

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2

Success At Last (For Now)

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Malorie Kaye Cameo PR (for White Pine Trading)

66

Rudy Klancnik

Calendar of Events

68

Advertiser Index

68

Emmett Murphy 3 CLiCk Media

Lou Tansky Uncle Ben’s Pawn Shop Michael Willingham iPawn Arkansas, Inc Pamela Wright Wright Pawn & Jewelry Company

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National Pawnbrokers Association

Steve Fowler SteveFowler.com

Pawnder This

Government Relations

Greg Engstrom AmeriPawn of Valparaiso

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28

Compliance AML Regulations and Credit Cards 46

Jerry Coyne Paysouth Merchant Services

Kathy Pierce Monster Pawn

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19

Marc Chamberlain FBI NICS Liaison Specialist

Book Corner

Certified Pawn Professional (CPP)

9

David Brough The Rapaport Group

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WINTER 2017

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message from the executive director

NPA staff Dana Meinecke

Membership – It’s Worth It As another year comes to an end, many of you will get an envelope in the mail from NPA. It’s not just an invoice for your dues – it’s your ticket to a stronger industry, better peer networking, and success as a business owner.

Our members have told us that being part of NPA is essential to staying relevant in the pawn world. Membership gives you the chance to meet your peers face-to-face in Dana Meinecke unparalleled networking opportunities. At NPA Executive April’s Legislative Conference, you and your Director fellow pawnbrokers can visit Capitol Hill in support of the pawn industry. In July, you can attend Pawn Expo, the annual convention and trade show held in Las Vegas, where you can learn new ideas at the education sessions, browse the exhibit hall floor, or meet old and new friends at any of the receptions. The amount of information exchanged at these meetings is staggering and crucial to your success as a pawnbroker.

The NPA Member Forum is one of our most valuable membership benefits, yet only 20 percent of our pawnbroker members take advantage of it. Participation in the Member Forum is like an open window into the back room of a pawn store. It gives you inside knowledge on which products work best, what scams or fake merchandise is circulating, and where to find great resources for those hard-to-find items. You’re missing out if you’re not a member or not signed up.

Of course, any association worth its weight in dues, has a parliamentary arm to keep its members apprised of any legislative activity that may detract from the success of the industry. NPA’s Government Relations Committee constantly monitors what is happening in Washington, DC, and is always at the forefront to help protect you and the association.

As we look forward to 2018, the entire NPA staff wishes each of you a warm and wonderful holiday season. And when that NPA envelope arrives, be sure to return it immediately, so you can start off 2018 at the top of your game!

Executive Director Dana@NationalPawnbrokers.org

Helen Moore Director of Meetings & Events Helen@NationalPawnbrokers.org

Yvette Craig Membership Manager Yvette@NationalPawnbrokers.org

Brittany McCorkle Program Coordinator Brittany@NationalPawnbrokers.org

Margie Swoyer Editor Margie@NationalPawnbrokers.org

Mailing Address: PO Box 508, Keller, TX 76244

Physical Address: 2920 W Southlake Blvd, Ste 120 Southlake, TX 76092 Phone: (817) 337-8830 Fax: (817) 337-8875 NationalPawnbrokers.org National Pawnbroker is the official publication of the National Pawnbrokers Association (NPA), and is published quarterly. No part of this publication may be reproduced without the written consent of Dana Meinecke, NPA Executive Director. Sale or distribution of any or all of the contents of this magazine is prohibited. All rights reserved. For more information on advertising or to obtain additional copies of National Pawnbroker, call (817) 337-8830, or send an email to Margie@NationalPawnbrokers.org. For membership information, email Yvette@NationalPawnbrokers.org.

EDITOR’S NOTE: This publication is designed to provide accurate and authoritative information on the subject matter covered. It is provided and disseminated with the understanding that the publisher is not engaged in rendering legal or other professional services. If legal advice is required, the services of a competent professional should be sought. Expressed opinions are those of the author and do not necessarily reflect the views of ownership. © 2007-17 National Pawnbrokers Association: PO Box 508, Keller, TX 76244, (817) 337-8830 NationalPawnbrokers.org EDITOR: Margie Swoyer, Margie@NationalPawnbrokers.org DESIGNED BY: SPARK Publications

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National Pawnbrokers Association

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WINTER 2017

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government relations

Success At Last (For Now)

Kathy Pierce Chairman NPA Government Relations Committee

The Government Relations Team has been focused this fall on reviewing the latest ruling handed down by the Consumer Financial Protection Bureau (CFPB). There had been much speculation and anticipation of when the Payday, Vehicle Title, and Certain High-Cost Installment Loans Final Rule would be filed and what, if any, changes there would be from their initial 2016 proposal.

The wait was over on October 5, 2017, and with over 1,600 pages, there is a lot to read.

The important thing is that non-recourse, possessory pawn loans are excluded!

Credit in which the lender has sole physical possession and use of the property securing the credit for the entire term of the loan and for which the lender’s sole recourse if the consumer does not elect to redeem the pawned item and repay the loan is the retention of the property securing the credit.

That is huge! Members of the NPA Government Relations Committee (GRC) have participated in face-to-face meetings with the CFPB over the past several years in order to explain just exactly what a traditional pawn transaction is, and is not. It took more than one session with them before they “got it”! Still, we were holding our collective breaths because you never really know what the CFPB is thinking or going to do until it’s already done.

The new CFPB “Small Dollar Rule” will go into effect 21 months after the formal publishing in the Federal Register. That is a lengthy period of time and you can be certain the industries that are covered will leave no stone unturned and exhaust every effort to gain relief from the rule’s requirements. NPA’s GRC will continue its monitoring of these activities in order to maintain the level of understanding about the pawn industry that we’ve worked so hard to achieve with federal

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WINTER 2017

regulatory agencies and members of Congress.

Meanwhile, your job is to insure that you are in compliance with all local, state, and federal regulations that apply to your pawn business.

A huge thanks to all of you who responded to the recent NPA survey regarding the possible availability of a means to perform the Military Lending Act (MLA) “covered borrower check” without having to acquire the social security number (SSN) of all your customers. The GRC has spent the last year looking for a solution and working with several credit reporting agencies to decide if a “nonSSN check” is possible; and then how it would

function in order to give pawnbrokers “safe Washington for the end of SSNs use as a harbor” with MLA. means of identification, including The White The results of the survey indicating your House. Meanwhile, the Department of Easy Name...Easy Business...Ea interest were positive and we were preparing Defense’s Defense Manpower Data Center $95 - $130 for .09 and below mix melee • $ to move forward. Then, an enormous security (DMDC) website remains the only way to Easy Name...Easy Business...Ea - $130 for .09 and below mix melee • $ breach, possibly affecting 147 million achieve a safe harbor for the$95 MLA checks.

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young pawnbroker to watch

Maurice Fuller Owner Chesapeake Square Pawn Chesapeake, VA Years in the Pawn Industry: 23 Best Advice I Ever Received: Treat the $20 loan customer just as well as the customer buying the $10,000 Rolex.

They are both equally valuable to the business and, at the end of the day, we are all the same.

My Top 3 Goals for 2018 Are: 1. Continued success 2. M ake Chesapeake Square Pawn a household name in the Hampton Roads area, synonymous with friendly and fair 3. Elevate the image of pawn shops and pawnbrokers through continued work with the NPA and modeling how valuable pawn shops are to the community Most Significant Accomplishments in My Pawn Career: n Earning my CPP designation n Independently opening my own pawn

shop, along with my wife Mary-Kathryn n Finding success in our own niche

winning “Best Pawn Shop 2017” in the Best of Hampton Roads contest during our first year in business My Media Mix: Musical Artists: Drake, Sam Hunt, Bruno Mars

Role Model: I believe that valuable

NPA Members Would Be Surprised

Social Media: Facebook

lessons can be learned from every

to Know That: I am a self-taught

TV Shows: MMA, nature and historical

person we meet and in everything

jeweler. I began teaching myself basic

documentaries, sci-fi movies

that we go through. I don’t believe in

jewelry repair when I opened my own

following in another’s footsteps; we

store. After many lessons and tips

My Industry Certifications Include: CPP,

control our own destiny. I do not have

generously provided to me by jeweler

GIA Gemologist, Notary Public

any specific role models, but in my

friends, and watching countless

life and in my career, I have learned

YouTube videos, I now successfully

When I’m Not at Work: I am spending

a lot from those that I have met and

perform jewelry repair and sizing on-

time with my wife and our four children.

obstacles that I have overcome.

site at my store.

WINTER 2017

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National Pawnbrokers Association

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pawnbroker spotlight

Monster Pawn

A Monster Mashup in the Midwest

I

n the middle of Illinois, a monster has been taking over the area. It’s a five-store pawn company called Monster Pawn that is run by Kathy Pierce and her husband, Edwin. They own a store in Bloomington and are partners in the Monster Normal, Monster Springfield, Midwest Exchange, and Monster Peoria stores. Kathy manages the Bloomington store and is also chairman of NPA’s Government Relations Committee.

National Pawnbroker (NP): Tell us about your company.

Kathy Pierce (KP): The five stores are between five and 45 minutes apart from each other. Monster Bloomington opened October 1, 2001. Midwest Exchange had been operating for 30 years before we bought it from Edwin’s mentor, Wes Lane.

NP: Where did the company name, Monster

Pawn, originate?

KP: I was a new mom with Everson, 3, and Annie, a brand new baby. Everson was watching the same movie over and over while I was busy with Annie. The movie was “Abbot and Costello Meet Frankenstein” – a black and white movie with Frankenstein, Wolfman, and Dracula. Monsters became an everyday word used in our house. So, when it came time to think about a name for the company, Everson suggested “Monster Store”.

Everyone should name their new company after a three-year-old’s opinion.

NP: How did you personally get started in the industry?

KP: I was a stay at home mom for seven years. When we opened Monster Bloomington, I helped out a few hours a day. As the kids got older, I worked more hours. Now, I basically live there six days a week!

NP: What makes your stores different from others in the area?

KP: We are family-friendly and provide great customer service with a large variety and selection of inventory. We serve popcorn and coffee every day and donuts on Saturday.

NP: In your opinion, what are the biggest 10

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National Pawnbrokers Association

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WINTER 2017

Kathy Pierce, Monster Pawn, Bloomington, IL

challenges facing pawnbrokers today?

KP: That would be the retail side of our business.

Competing with Amazon and eBay is not only a Macy’s and Sears problem, but is now a challenge for every small mom-and-pop business. The regulations change quickly, so staying up-to-date and compliant is the priority for all pawnbrokers. We do not have the luxury of having a human resources department to guide us through the rules. That is why belonging to the NPA and your state association is imperative to help you run your business and be compliant.

NP: Has the new Military Lending Act rate cap

affected your company?

KP: No, but it has opened up conversations with pawnbrokers and customers with questions about rates, veterans, active military service, and what is fair and reasonable to ask customers. Everyone knows that giving out your social security number (SSN) is a big no-no. So, it’s not easy to ask your customers. The Social Security department will tell you to never give out your SSN, yet the Department of Defense says you have to ask your customer for their SSN to get a positive or negative answer from your customer regarding their military status. Or maybe, you could just ask your customer if they are in the military or a dependent of someone in the military? Have a conversation, not just a transaction.

NP: What is the best advice you have ever received?

KP: Remember that if your customer is asking for

a pawn loan, they are probably having a bad day. Be cheerful, be helpful, and never judge.

NP: What is the funniest thing that has happened to you since you became a pawnbroker?

KP: There is always something silly or funny happening at work. But, maybe the oddest is that I am very recognizable and the customers have changed my name.

I am either “Mother” or “Mrs. Monster”. That can be taken so many different ways....

NP: How does your company give back to the community?

KP: We have a huge party the Saturday before Christmas at a local music venue. It’s the Christmas Eve Eve Eve party as a thank you to our customers and community. Local bands play and there is food and an open bar. We sell Monster Pawn pink breast cancer t-shirts with the money going to our local cancer center.

We also support the schools’ fine arts departments, motorcycle fun runs, and provide silent auction items for local fundraisers throughout the year.

NP: How can NPA improve the relationship with its members?

KP: Continue with the pawnbrokers’ educational

needs and also offer a place for the members to communicate on business and industry topics.

NP: Why are you a member of NPA? KP: I was a stay-at-home mom! I did not know

anything. Looking back now, it’s really a miracle.

The NPA helped me with so many questions and connected me with mentors. I was able to talk with pawnbrokers who were from a three-generation business. Information and help I received from pawn legends [includes]: Tom Brown, Frank Ingram, Ramona Thompson, Craig Rabiner, Lou Silver, Janis Feazelle, Mitch Kaminsky, and Jackie Kinlaw. I am lucky and grateful for the guidance I was given from everyone in the NPA. NP: Tell us something about yourself that

would surprise us.

KP: I am a Civil War history geek. I have been to over 18 battlefields and have a list of more still to visit. I always end up crying at some point. I am the history nerd in Washington, D.C. I read every night, either Civil War history or vampire trash.

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Palak Diam

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Palak Diam Putting clients first for over 80 years

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P

alak Diam is a third-generation diamond company that is well-known to NPA members. As an industry partner member since 2005, Ankur Savani and his company have been a regular exhibitor and sponsor at Pawn Expo for a number of years. They are one of the leading buyers of diamonds of all sizes, color, and qualities.

Kanaiyalal H. Savani, Ankur’s grandfather, began his career as a diamond cutter for a large diamond factory in India at a very young age. There, he learned the fundamentals of the diamond business, and then went on to establish his own company in 1935 to buy and sell diamonds. His son, Dipen Savani, Ankur’s father, later joined him in the business after he finished college in India.

Seeing opportunity in the United States, Dipen immigrated to Los Angeles in 1981 to set up a wholesale diamond business in the diamond district. Following in his same footsteps, Ankur entered the diamond business after graduating from college in southern California.

While their global headquarters is located in Los Angeles, they have 12 sales offices spanning five continents with over 150 employees across all locations. Palak Diam has only one motto by which it operates: “Our clients come first, always.” Their passion

National Pawnbrokers Association

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Ankur Savani, President, Palak Diam

for diamonds is reflected in every facet of their business – from the manufacturing standards they maintain, the precision of their assortments, and the vast array of services they offer their clients.

Unlike other diamond buyers, they are vertically integrated and own their own diamond factory and sales offices. They are not “middle-men”, but instead, add value to the diamonds by re-cutting and re-polishing them. The key to their success, according to Ankur, is that they genuinely care for their clients. They provide excellent, honest service, and aim to ensure their clients are fully informed and educated.

As for design trends, they have seen yellow and rose gold metals gaining popularity. Bridals and studs remain popular, and account for a

stable portion of the diamond jewelry sales. “We are seeing less jewelry being melted and refined which, in turn, reduces the quantity of breakout diamonds that becomes available. Since the “gold rush” boom has ended, our biggest challenge is purchasing more breakout diamonds,” stated Ankur.

To get the best price for diamonds and melee, Ankur suggested these steps:

1

Have your diamonds cleaned in ultrasonic or have your refinery clean and “frost” your diamonds so the cubic zirconias can be picked out quickly.

2

Separate the diamonds by size using a diamond sieve set. It is a very quick process, and the sizes should be categorized as 8 points and smaller in one category, 9 to 15 points in the next, 16 to 23 points in the next, and finally, above 23 points.

Anything above 90 points should be kept as individual stones.

3

Weigh each category by carats.

After that, the diamonds should be ready for inspection. The diamond buyer should evaluate each lot on color and clarity. For any stones above 90 points that are already well cut, send them to GIA to get certified; then get a price quote.

When asked how the influx of synthetic diamonds has affected his business, Ankur stated, “Overall, the market share for lab grown diamonds is still currently very small. One of the biggest issues we face is the unethical practice of selling lab grown diamonds as natural diamonds. Certain deceitful people are mixing small lab grown diamonds with natural diamonds, and then selling the whole lot as natural diamonds. In the last year, machines that detect lab grown diamonds have gotten cheaper and more reliable. This December, GIA is scheduled to start selling a machine for under $5000 that will detect lab grown diamonds set in jewelry and loose stones. We feel there is a strong market for both lab grown diamonds and natural diamonds, and both can co-exist provided that customer confidence is not broken.”

To find out more, visit PalakDiam.com. Contact Ankur by calling (213) 228-0077 or sending an email to ankur81@aol.com.

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business solutions

LinkedIn:

Recruiting Solutions Within a Professional Network

by Emmett Murphy, 3 Click Media, Inc

W

e all know that LinkedIn is the largest professional online network. However, you probably don’t know that 85 percent of their 500+ million users are open to new job opportunities, even when they’re not actively seeking new work.

The strategies for recruiting new employees are rapidly evolving as job hunters flock to online job and networking websites. This is especially true for younger and newly-unemployed job seekers who rely more on social networks than traditional job boards, like Monster or CareerBuilder, to find work.

Employers, on the other hand, 16

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Pro Tip: LinkedIn users usually don’t use their current business email addresses in their LinkedIn profiles; they use personal email addresses. If you have ever wanted to connect with someone outside of

tend to utilize popular online job websites like Craigslist, Indeed, and ZipRecruiter to announce job openings. By casting such a wide net, recruiters place the onus on candidates to find their job listings.

Additionally, this approach can result in hundreds of resume submissions from unqualified people who are desperate to find any job. LinkedIn has filled this gap by building a robust recruiting tool right in the middle of the world’s most successful professionals-only network.

On LinkedIn, a multi-pronged approach increases your chances of connecting with, and hiring, the right person for your pawn business. Here are multiple strategies to effectively use LinkedIn as a recruiting tool: active networking, targeted job posts, and social media crossover.

Active Networking

LinkedIn is only as good as your network. While it’s a great way to connect professionally with potential job candidates and others in your industry, it can’t be done overnight. If you are going to take this seriously, you will need to build these relationships authentically over time. LinkedIn may even curtail your use if you try to connect with too many people at once. The good news is that, because LinkedIn is a professional relationship network, people are typically open to connecting more readily on it than on deeply social sites, such as Facebook.

their current business email, check their If you are interested LinkedIn “Contact and Personal Info” in actively using LinkedIn for professional section for a personal email address. This recruitment, you should may give you a direct line to them to consider signing up for help break through the barriers of B2B LinkedIn Premium, which communications and recruitment. is a premium paid feature.

Currently, it costs $47.99 per month, but it is well trying to connect with isn’t interested worth it. This level of membership in connecting with you. Be patient, unlocks a set of premium options and don’t take it personally. It can like unlimited searches and limited often take months for people to use of their direct messaging service accept your invitation to connect. called “InMail” to reach out to By connecting with professionals people with whom you don’t already who surround other people in your have a connection. industry or profession, you’re able to Once you’ve connected with a few communicate and interact with them LinkedIn users within your industry, in various ways. the site will recommend “people you may know.” You can use your n InMail messaging allows you newfound connections to further to send direct messages to mine the networks of your existing potential candidates. connections. These people are often n You can access their contact directly connected to others within information, professional network, your industry and may be qualified and job status. job seekers. n You can view all of their activity For the most successful approach, as it happens through your start at the top of a company, LinkedIn feed. connecting with executives and managers, and then access their Targeted Job Posts connections. This is called “building LinkedIn has a new service, a referral chain” and can lead to LinkedIn Recruiter, which allows quick connections and potential companies to create job posts and recruitment opportunities. target specific candidate types. The Remember that people typically service automatically broadcasts your do not use LinkedIn as frequently or job posts to users who match the the same way as Facebook or Twitter. experience and skills you’re looking for.

LinkedIn takes time. Its usage is This service works on a pay-per-click more sporadic and unpredictable model, so you can set your budget, with long periods of silence. This can plan your timeline, and only pay when make it appear that someone you are someone views your job posting.

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business solutions This service also automatically generates a short list of up to 50 candidates that matches your job posting, and allows you to contact job seekers directly, track applicants, and review real-time analytics to give you the tools to see what’s generating interest and what’s not.

To get an idea of how this strategy is being used on LinkedIn by pawnbrokers, visit LinkedIn.com/ jobs/pawnbroker-jobs.

Social Media Crossover

If you’re looking to connect with high-level executives, managers, or experienced staff, it may be worth your time to explore cross-network recruiting. This strategy requires a bit more time and finesse, but it can be an influential way of

connecting with key candidates.

Your strategy should be to connect professionally on LinkedIn, then bond socially on Facebook. When you’ve connected to someone of importance on LinkedIn, your name and business will be more recognizable when you casually request to connect on Facebook.

Why Facebook? Facebook’s “social” environment is conducive to a more open and friendly state of mind.

Facebook users are more inclined to socialize, direct message, or chat with you, building a bond that isn’t possible on LinkedIn. This style of recruitment can build trust over time and opens the channels of communication with otherwise unreachable candidates.

The pawn industry is a small

enough community that targeting experienced employees on LinkedIn can be an effective tool, especially for executive and management positions. Most importantly, LinkedIn can provide a way to promote positions available in the pawn industry to people who may have not considered becoming a pawnbroker in the past.

3CLiCkMedia is a digital design and online marketing firm that combines cutting-edge technology with tried and true media strategies to build movements that get results. For more information, visit their website at 3clickmedia.com.

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behind the scenes

Fran Bishop Mrs. Bishop Goes to Washington

F

ran Bishop has been involved with NPA since 1991 and is one of the association’s most well-known members both in and out of Washington, DC. As NPA’s Government Relations Liaison, she coordinates and directs all activities pertaining to the government relations and regulatory compliance missions of the association. She works directly with the government relations committee, NPA’s regulatory counsel, and the association’s lobbyist; the NPA Board of Directors and members; as well as the state associations.

She communicates with members of Congress and federal regulatory agencies on behalf of the association and facilitates the Federal Regulations course for the Certified Pawn Professional program. As Fran says, she is “on call 24/7/365 to preserve, protect, and defend the pawn industry and NPA.” Fran is the first to admit that her job is very challenging, but she is most satisfied with her role in helping keep the pawn industry 75 percent out of Dodd-Frank. If she could change one thing for NPA members, it would be to exempt the pawn industry from the Department of Defense Military Lending Act (MLA) regulation once again. Her favorite part of the job is when she is educating members of Congress and

Past NPA Presidents: Ed Bean, Fran Bishop, Brian Smith

their staff about the pawn industry and “the light finally goes on above their heads.”

Fran comes to the NPA with a great deal of first-hand pawn knowledge. She and her husband, Tony, opened Dollar Pawn in Haleyville, AL, in February 1989.

They soon joined with other pawnbrokers to organize the Alabama Pawnbrokers Association and worked to get a pawn law passed in May 1992. She is a past president of NPA and winner of numerous awards including the NPA’s Charles R. Jones Lifetime Achievement award and Pawnbroker of the Year.

With her strong southern accent and hospitality, you would never know Fran was originally raised on a dairy farm in Michigan. After school, WINTER 2017

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she moved to Florida where her older brother was in the military. She was soon joined by her grandmother and sister and they made Florida their permanent home.

Out of the government relations limelight, Fran enjoys her four grandchildren and her five classic/ muscle cars. When asked what might surprise our members about her, she said, “I learned how to drive on a John Deere tractor in a hay field when I was too small to sit on the seat and reach the pedals.

I can milk a cow by hand if the power goes out, round up cattle on horseback, and I have a “lead foot” when driving my ’98 TransAm.” If you have any government relations questions, feel free to contact Fran at GRC@NationalPawnbrokers.org.

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member benefits

Winning at the Employment Game

1

You’ve placed the ad, received the resumes, and are ready to start

interviewing candidates. What can you legally ask and what should you stay away from?

2

Your best employee is causing problems with other staff members.

You’ve discussed the situation with him/her, but nothing has changed. What is your

Don’t despair. The answer to these questions, plus a whole lot more, is just a phone call away.

As a member of NPA, you have free access to the SESCO Management Consultants hotline for your human resource and employee questions.

Plus, you can request an analysis of your personnel policies, work rules, and employee handbook each year – also free of charge.

From hiring to termination, SESCO Management Consultants is here to help you solve your employee concerns. Find out what you need to do as an employer to stay on the right side of the law.

“SESCO is a fabulous member benefit. I had an issue with hiring a new employee regarding medical marijuana.

I found out that, even though it is legal in California, there is a federal law that prohibits me from knowingly hiring someone who is taking marijuana. My worker comp carrier would have canceled me if I had hired her! Thank goodness for this wonderful

next step?

resource. It saved me a lot of

3

problems.”

You’ve heard rumors of some new legislation regarding hourly

workers. Are you in compliance?

– Diane Taylor, Trader’s SESCO Management Consultants Sescomgt.com (423) 764-4127 Sesco@Sescomgt.com Be sure to identify yourself as an NPA member.

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business solutions

Diamond Trade Increases Marketing Ahead of Holiday Season

A widespread advertising campaign aims to lift consumer spending — and with it, diamond prices.

By David Brough

Polished Inventories Rise

D

Seasonal factors partly accounted for the moderate volume of trading that took place during the quarter, with U.S. wholesalers taking vacation in July and the markets in Belgium and Israel shutting down for their respective summer holidays in August.

Trading improved in September, and diamantaires were relatively satisfied with activity in the loosediamond section at the September Hong Kong Jewellery & Gem Fair, a leading international trade show and a barometer for pre-season diamond demand. Business was done, albeit at lower price levels.

Beyond the seasonal factors, a number of trends have influenced the continued decline in polisheddiamond prices and demand. One is that jewelry retailers are being

iamond trading slowed and prices softened in the third quarter of 2017, highlighting the need for strong marketing that will boost consumer spending during the holiday season.

The price declines extended to September, putting pressure on manufacturers’ profit margins and liquidity. The RapNet Diamond Index (RAPI™), a widely tracked measure of polished prices, fell 0.7% during the month (see chart). RAPI for 0.30-carat diamonds declined 1.6%, while RAPI for 0.50-carat diamonds declined 2.6%. RAPI for 3-carat diamonds increased 1.8%.

RAPI for 1-carat diamonds slid 4.5% in the first nine months of 2017, after falling 6.8% in 2016.

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careful not to build up excess inventory and, therefore, require fewer goods than in the past as they adapt to a changing consumer environment. That’s putting pressure on diamond suppliers, which are left carrying the inventory they would otherwise have sold to jewelers.

“There’s an excess of polished not being consumed at the rate it used to be,” said Dovi Friedmann of Londonbased company Doja.

Inventory held by polished suppliers has increased with the quantity of diamonds listed on RapNet, Rapaport’s diamond trading network, rising 21% in the first nine months of the year to 1.43 million stones.

U.S. Driving Growth

The slowdown in trading and polished prices over the past few

4% RapNet Diamond Index (RAPI™) RAPI 3% for 1-carat diamonds slid 4.5% in the first nine months of 2017, after falling 6.8% in 2016.

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Rapaport Melee Index (RMI™) The Rapaport Melee Index (RMI™) for tracking small diamonds — which are often recovered from set jewelry and traded in the pawnbroker and secondary market — also declined in the third quarter, dropping 10.6% compared with figures from June (see chart).

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grew just 0.3% to $81 billion in 2016, according to the recently published De Beers Diamond Insight Report. The United States remains the main driver of global growth, accounting for 51% of global diamond jewelry demand, the report showed.

Stable macroeconomics, job creation, wage growth, a strong stock M

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Association (DPA) secured a $57 million budget for 2017 — of which $50 million has been earmarked for the U.S. — to fulfill its mandate of leading a generic marketing campaign on behalf of the industry.

The industry is hoping the campaign will stimulate consumer spending on diamond jewelry, after global demand A

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years has signaled that more needs to be done to stimulate demand.

The trade has woken up to that need by increasing its marketing activity, and there has already been an apparent rise in storytelling marketing planned for the second half of this year.

The Diamond Producers

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business solutions market, and improved consumer confidence in the world’s largest economy have underpinned rising demand, De Beers explained.

The strength of the U.S. dollar against most currencies, along with macroeconomic and political challenges, restricted growth in other markets, the company said.

Empowering Women

De Beers significantly raised its marketing budget to $140 million for 2017, with its holiday campaign set to focus on female self-purchases. The report stressed that the changing role of women in society was having a major impact on diamond jewelry demand.

“Women now have much more spending power than they did in previous generations, and there is a

much higher degree of self-purchase than before,” it said.

The way in which women perceive themselves is evolving, it continued, explaining that while there were distinct views in different countries, one constant was that womanhood was becoming more closely associated with a sense of strength and empowerment.

These changes in the profile of the female consumer have direct impacts on businesses in the diamond sector, and some of the traditional thinking about diamonds will need to be reassessed, the report added.

“While the notion of love remains universal and powerful, and the core attributes of diamonds remain valued, there is an increasingly wide spectrum of meaning for diamonds,” De Beers explained. “As well as commitment, they also symbolize

www.suryains.com 24

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emotions such as joy, optimism, pride, and confidence.”

The Rapaport Group is an international network of companies providing added value services that support the development of fair, transparent, competitive and efficient diamond and jewelry markets.

Established in 1978, the Rapaport Price List is the primary source of diamond price and market information. Group activities include Rapaport Information Services, Rapaport Magazine, and Diamonds.net, providing research, analysis and news; RapNet – the world’s largest diamond trading network; Rapaport Laboratory Services provides GIA gemological services in India, Belgium and Israel; and Rapaport Trading and Auction Services specializing in recycled diamonds and jewelry. The Group supports over 20,000 clients in 121 countries and has offices in New York, Las Vegas, Antwerp, Ramat Gan, Mumbai, Surat, Dubai, and Hong Kong. Additional information is available at www.Diamonds.net.

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membership

Maximize Your Membership How to get involved with the NPA

A

s a member of the NPA, you are part of a dynamic industry that is constantly evolving with the economic and legislative whims of the country. The association has developed a number of opportunities and programs to help advance your business growth, but they require your participation in order to get the most out of your membership. Getting involved offers many opportunities to grow as both a business owner and as a person. By volunteering your time, your network will be broadened and you‘ll find new enthusiasm for the industry.

Before you move forward with your commitment, be sure you have the time, energy, and funding that may be required for participation. Attending an event, serving on a board, or meeting with legislative leaders requires a certain amount of passion. It may take time away from your family and your business as well as money from your wallet. Decide what skills or knowledge you can offer and what areas you are most interested in. Then make the commitment to get started immediately!

Below are five easy ways to get more involved with NPA:

1

Be a leader nS erve on a committee or the Board of Directors.

There are many opportunities to serve the NPA by volunteering for a committee or running for a board position. Share your leadership skills and help guide the association in delivering its mission. n Become a mentor.

There’s no better feeling than knowing you made an impact on someone’s life. As a mentor to those new to the pawnbroker world, you can help shape another person’s career path and long-term thinking. Share new ideas and open new doors for them by serving as a mentor through NPA’s Mentor Program.

2 Enhance your education nG et your Certified Pawn Professional (CPP) designation.

Show your customers you have the skills and knowledge required to be a successful pawnbroker by completing the CPP certification program. Five of six classes will earn you this important mark of distinction. Click on the CPP tab on the NPA website to learn more. n Attend a webinar.

The NPA offers human resource and other webinars throughout the year. Take advantage of these free educational sessions in the comfort of your own office. You’ll save hundreds by not traveling or staying in a hotel.

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3 Attend an event nS hare your story at the NPA Legislative Conference.

Held annually in Washington, DC, the NPA Legislative Conference is your chance to get front and center with members of Congress. Share your pawnbroker’s story and make an impact on the legislative sector. The NPA makes the appointments and provides talking points, so all you have to do is show up ready to advocate for the industry. The 2018 Legislative Conference will be April 24-25. Put it on your calendar now!

5 Connect with your community nN ominate a student for a Future Business Leaders (FBL) scholarship.

College costs are increasing every year, and so is the competition for scholarships. When you sponsor a college student for one of the FBL’s annual $1000 scholarships, you are inspiring confidence and creating an opportunity for a young person to advance their education. A scholarship can make all the difference in a young person’s life. n Visit PawnShopsToday.com.

nL earn, see, and experience all you can at Pawn Expo.

NPA’s annual convention and trade show is held every July in Las Vegas, NV. Join your industry peers to network, learn new business techniques, and attend educational sessions designed to help you succeed as a pawnbroker. It’s business, but there’s a lot of fun included. Visit PawnExpo.com for more information on the 2018 show.

4 Share your wisdom

Do some people just not get what you do? Send them to PawnShopsToday.com to learn all they need to know about the pawn industry, and more.

History, trends, stats, and how a pawn loan works are just some of the topics covered. Check it out and see if you learn something new, too.

Don’t let your membership sit idle. Activate it by getting involved with the NPA and your industry peers.

When the industry rises to excellence, so will you as a pawnbroker. Maximize your membership investment and watch your business grow!

n Participate in the NPA Member Forum.

By engaging in this active online pawnbroker discussion group, you can learn what you don’t know and share what you do know. Get an insider’s view of what’s going on in the industry and gain valuable knowledge concerning all aspects of operating a pawn business.

Members says it’s one of the best NPA member benefits offered. nS ubmit an article for National Pawnbroker magazine.

The quarterly member publication highlights industry developments, member success stories, and business tips from pawn experts. Submit your story ideas or offer to write an article for an upcoming issue. If it’s important to you, it’s probably important to other pawnbrokers as well.

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business solutions

Bringing In the Cash Simple Ideas to Generate More Revenue

E

very pawnbroker wants to be successful. That’s one of the reasons they went into business. But, like all companies, sales can be cyclical. To compensate for those downtimes, it’s important to have other revenue streams to even out the cash flow.

Pawnbrokers have looked at several ways to increase their revenue and, sometimes, these additional profit centers can generate significant income. A few examples are:

n n n n

Jewelry repair Reseller on eBay Tool and pro-sound equipment rental Tax refund services

An example of a successful jewelry repair service is offered by Greg Engstrom of AmeriPawn in Indiana. Greg says, “If you don’t have a jewelry repair person (goldsmith) on staff, you are losing out on the biggest profit area of pawn shops, especially since jewelry is the number one item pawned.”

An important part of jewelry repair is refurbishment of the jewelry you put out for sale as well as the way the items look on your customer’s finger. There is nothing like a piece of jewelry that looks new, feels new, and is ready to be sold. The big difference between a great profit center and a decent 28

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profit center is that professional finish work.

Trust is also a very important part of the retail jewelry business, and having a goldsmith adds to the trustworthiness of your store. People will leave their valuables with you to size and repair. Even if you have to send some of the more complicated work out to another shop, having that goldsmith visible to the public is a huge benefit.

The most important things your goldsmith will need to be able to do are: n n n n n n

Refurbish to “like new” status Rhodium plate Size rings Reset small diamonds that have fallen out Solder gold chains Change watch batteries

Of course, the ideal situation is to have a fully-trained goldsmith on staff. While well worth it, he/she may cost more than triple what your average clerk is getting paid. If you start with the basics above, then add skills by getting additional training, you will have a terrific growth pattern that will propel your sales. Today’s customer is not patient, so the ability to size a wedding set “while you wait” will make many sales on the spot!

Admittedly, goldsmiths are hard to find, but someone with working knowledge of jewelry repair and the willingness to get their fingers dirty can make a key difference in your store.

If you don’t have the necessary jewelry repair training, there are schools where you can send an energetic and motivated staff member as well as schools for gemology. This goes hand in hand with watch repair, too, but that is a much more complicated subject and not a good place to start.

The investment in the person, and in the tools and equipment, will pay for itself much faster than any other new thing in your store. And you can take that to the bank.

At first glance, some services or products offered may not seem like they could be moneymakers, such as:

n n n n n n

Lottery ticket sales Keys cut to order Sales of money orders Jewelry polishing Bill payment services Faxing documents

However, it’s not always the money you make from these services as it is the number of clients it can bring in the door. The math is simple: more customers walking into the store equal more opportunities to introduce them to the unique and varied goods and services your stores offer.

The secret to creating additional profit centers is sometimes to think outside the box, according to Lou Tansky from Uncle Ben’s Pawn Shop in Cleveland, OH. “One pawnbroker I know wanted to offer an in-house coffee bar and an on-premises hand car wash. His thinking was that his clients could get their car washed and have a good cup of Joe while waiting. He hoped to turn that wait into an opportunity to create more sales. Ultimately the plan fell through due to zoning issues, but to this day he still says, ‘What if…..’”

So, put on your thinking caps and see what ideas you can come up with.

Contributors to this article include Lou Tansky, Uncle Ben’s Pawn Shop, and Greg Engstrom, AmeriPawn.

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18 More Stores Sold

Stallcup Group facilitates the sale of 2 separate companies in Arizona and North & South Dakota!

December 2016 – Stallcup Group, Inc., an Exit Strategy Consulting firm, announced its successful facilitation of the sale of Pawn 1st, LLC and First National Pawn.

Both are independently-owned business that comprised 18 pawn shops located in Phoenix and North and South Dakota. Stallcup Group served as the exclusive financial advisor to the sellers in these highly successful transactions.

Stallcup Group’s thorough analyses of the sellers’ financial data, and the unique attributes and characteristics of both companies and individual stores helped ensure their clients achieved all of their selling goals.

Here is what other clients of Stallcup Group have to say about their successes: “Stallcup Group’s dedication to the sale of my company resulted in a 12%-15% higher closing price than the initial offer letters from various buyers. To my surprise there were multiple facets of negotiations above and beyond the final purchase price that the Stallcup Group handled with expertise. These results were tangible and financially beneficial. There is no doubt the results would not have been nearly as profitable without Stallcup Group.”

– Mike Fisher, Regent Jewelry & Loan, 4 stores in TX “Ultimately, I was most impressed with Stallcup Group’s financial modeling, which is extremely sophisticated, and their ability to package information in a way that buyers want to see.”

– Craig McCall, 12 stores AZ/NV

Why Stallcup Group?

We have more than 30 years of experience in the pawn shop industry and have closed almost $205M in transactions since founding the business in 2009. We are the leader in Exit Strategy Consulting, and solely represent pawn shop owners. All Stallcup Group’s clients have realized a purchase price increase of 10-50% from initial offer to final closing price.

Contact us directly, and let us evaluate the true value of your pawn business:

Steve Stallcup

steve@stallcupgroup.com

817.479.3880

STALLCUPGROUP.COM

business solutions

Star length

Table size

Crown angle

Girdle thickness

Total depth

Pavilion angle Pavilion depth

GIA Anatomy of a Diamond

Lower girdle/ half facet length Cutlet

A Guide to Grading Diamonds Set in Jewelry

by White Pine Trading

D

iamond grading can often seem very straight-forward and formulaic, especially when looking at a single, loose stone. However, once you begin evaluating diamonds that are already set in jewelry, appraising each stone can become quite complicated. There are a number of factors that can easily help to properly gauge the value of diamonds set in jewelry beginning, of course, with size.

likely want to determine is its carat weight.

To do so, you will need a millimeter gauge.

Ideally, you will have access to the table and culet of the diamond. If not, you will need to estimate their position and edges as accurately as possible in your measurements.

Once the piece is in the right position, use the formula below to estimate the carat weight of a round brilliant diamond: Estimated carat weight = average girdle

Carat Weight

diameter squared x depth x 0.0061 x

The first characteristic of a diamond you will 32

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weight correction

Brilliant Cuts

The “weight correction” accounts for girdle thickness. Use the chart of weight corrections at the right: If the round brilliant diamond is set within a mounting that has a closed back, use the formula below to estimate the depth: Estimated total depth percentage = crown height % + girdle thickness % + pavilion depth %

Often times, you will want to obtain the depth in millimeters. To do that, you can use the formula below:

.05 ct

2.3 mm

.10 ct

2.9 mm

.20 ct

3.7 - 3.8 mm

.25 ct

4.0 mm

.35 ct

4.5 - 4.6 mm

.50 ct

5.0 - 5.2 mm

.75 ct

5.7 - 5.8 mm

1.00 ct

6.3 - 6.5 mm

1.50 ct

7.3 - 7.5 mm

Estimated depth in mm = average girdle diameter x (depth % divided by 100)

An important point to keep in mind when buying diamonds mounted in jewelry, is that the value assigned should be based on the carat weight of the final (realized) product, rather than the actual (scale) weight. For example, if you are assessing a 1ctw, 6.1mm diamond, it is a “buyer beware” situation. In its present form, the diameter to weight ratio is poor, which means the diamond will require re-cutting in order to sell. With re-cutting, you will lose points off the stone, making the final (realized) weight less than 1ctw. This new and final weight is the one that should be used when assessing mounted stones to ensure you get maximum value from your purchase.

Clarity

Following carat weight, it is essential to look at clarity. When it comes to determining the clarity of a mounted diamond, it’s important to be aware that the stone might be positioned so that imperfections are hidden behind a prong. However, you can use reflections to determine what is behind a prong. With good lighting, focus on the areas behind the prongs by rotating the piece toward you, then away from you, and then back again multiple times to see if any issues reveal themselves.

If it is difficult to determine if an inclusion reaches the pavilion surface, grade the stone as if the imperfection is on the crown. It is always best to estimate conservatively. And, for stones under 20 points, you should assign a range of two grades, as it is very difficult to see inclusions in small stones.

Color

The next factor to evaluate should be color. Not only do mountings prevent you from getting a clear view of the pavilion, the color of the metal can also affect the appearance of a diamond’s color. For that reason, pieces like tennis bracelets and earrings often use stones with lower color grades.

2.00 ct

8.0 mm

2.50 ct

8.6 mm

3.00 ct

9.0 mm

(Continued on Page 65)

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product knowledge

Beauty or Beast?

by Pamela Wright

C

arrying personal accessories, money, and keys has been a concern for women and men for hundreds of years. From the 18th-century, heavily-embroidered pockets to the finely-crafted handbags of today, personal style remains an important part of fashion.

Often, customers consider a luxury designer handbag an investment and a perfect item for pawn. But is it an authentic beauty or a counterfeit beast?

The best way to spot a counterfeit is to know what an authentic bag looks and feels like. There is no substitute for handling a real Hermes, Chanel, Louis Vuitton, Celine, or Judith Leiber handbag. Visit stores selling Prada, Valentino, Dior, YSL, Gucci, Michael Kors, Coach, and other designer brands. Look at the

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The Louis Vuitton Neverfull is one of the most popular handbags due to size and durability.

Along with the Speedy, it is one of the most counterfeited.

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product knowledge current styles, interior fabrics, and hardware, and feel the weight in your hands or on your shoulder. Notice what brands are on sale.

Authenticating a bag is often difficult as counterfeits abound at all price points. While most customers will not have the original receipt, they will know the name of the handbag and the date purchased.

If the customer says the bag was a gift, this may be a red flag. A Chanel serial number, Louis Vuitton date code, or Hermes stamp are clues to the age and country of origin. These numbers are readily counterfeited, so study the font styles and stamps used in authentic bags. Verify the bag production year corresponds with these stamps.

Hermes handbags do not come with orange cards or hang tags, so if your customer provides these, beware! Exotic Hermes and Chanel bags do come with Convention on International Trade in Endangered Species (CITES) passports to allow the owner to travel between countries. Chanel handbags come with black credit card style authenticity cards (no rainbow hologram) matching the serial number. Matching cards and serial numbers do not guarantee authenticity.

Did the manufacturer make the exact model in the pattern and color presented to you? Does it measure identically to the original? Is the interior color correct? A pigskin interior is never authentic for Hermes, Chanel, and Louis Vuitton, but is for Nancy Gonzales. Pay close attention to the color of the fabric and placement of the name on the dust bag.

Smell the interior of the handbag.

An odor of mold, paint, or chemicals indicates counterfeit. Hermes, 36

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Chanel, and Louis Vuitton each have very distinct recognizable scents. Be sure to visit the boutiques and smell for yourself!

Louis Vuitton

Louis Vuitton bags are not sold wrapped in plastic or with hang tags.

The light beige natural cowhide leather handles on the classic monogram turn a golden honey color with use. The edge of the leather is a crisp red color. New Chinese counterfeits often have a light pinkish beige or artificial leather that also turns a golden honey color with use. Very often, the uneven or painted-on red edges will be the only red flag. The stitching should be perfectly straight and evenly spaced.

The yellow thread should not have a green or neon tint.

Chanel

Chanel handbags will have at least ten stitches per inch. The stitching will be symmetrical and leather quilting very thick. On the classics, the back pocket will be slightly curved with the stitching and pattern matching the one underneath. Check the CC lock hardware. Be sure the right C overlaps the left C at the top and the left C overlaps the right C at the bottom. This hardware should appear flat, not curved, but many counterfeits have mastered the shape.

Hermes

Hermes handbags come in unique colors that are difficult to match.

The color should not be uneven or appear painted on the surface. The Hermes Paris logo will be stamped perfectly straight on the front center of the bag. Look for smeared letters and incorrect fonts. There is a blind stamp on the back of the sangle

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(draw strap) indicating the year made and atelier. This stamp has been moved to the upper left corner of the bag since 2016. Keys with the numbers 102, 121, or 212 are often counterfeit even though originals also use these numbers. Hermes stitching is very small and hand-sewn on a diagonal. Almost all Hermes owners retain the original receipt and box.

Carefully examine the receipt paper, font, and logos for authenticity.

Michael Kors

Michael Kors bags have different linings for boutique or outlet bags.

Since handbags come in all colors and shapes, it’s up to you to determine whether the authentic bag comes in the color and pattern presented at the counter.

An authentic bag will not have an animal print interior. The country of origin will be printed on an interior tag. The care cards and paperwork will be printed on tan paper.

Coach

The Coach logo is always presented in straight sets of two.

The inside Coach Creed tag should include style number and registration number with wording evenly spaced and spelled correctly.

Coach bags are manufactured in China and this appears on the tag.

All hardware should be polished

heavy-duty nickel, not plastic.

Coach, Michael Kors, and Dooney & Bourke are often discounted in department stores and/or sold at outlets. Hermes and Louis Vuitton are never discounted, and very few Chanel handbags are placed on sale. Limited edition and runway handbags may be difficult to resell.

The world is full of counterfeit beasts, and it is almost impossible not to be fooled at one time or another.

One of my long-time customers brought in five fabulous handbags all with authentic boxes. Of course, WINTER 2017

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our store was packed with people creating pressure to complete the deal as quickly as possible. Partially relying on my previous experiences with her, I ignored a red flag. In the end, four were beauties and one was a beast in an authentic box, raincoat, and dust bag. If you constantly study the brands and pay attention to red flags, this will never happen to you!

Pamela Wright is co-owner of Wright Pawn & Jewelry Company in Houston, TX.

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business solutions

Does Your Business Have an Identity Crisis?

by Michael Willingham

W

hat business are you in?

It’s a great question, but the answer isn’t always as obvious as you might think. If you have read many business books or publications, you are most likely familiar with a statement similar to this one: “The railroad business thought they were in the railroad business instead of the transportation business.”

Those running the railroad companies knew what business they were in and it was a good business - until it wasn’t. Then, it was too late. If you are ineffective at recognizing the business you are in, you risk being ineffective at attracting new customers.

In today’s marketplace, you must ask yourself this difficult and important question: what business are you in?

Volvo is not in the car business. They are in the business of making travel safe. Apple dropped the word “computer”

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business solutions in? If you said the money business, you are only partially correct. You are in the business of creating remarkable customer service experiences.

There is never a shortage of surveys that list companies who have great or poor customer service. But whenever you look at a list of companies that have the best customer service, the list typically includes: n n n n

from its name some years ago.

Years ago, gas stations basically sold gasoline. As the margins on what they were selling were reduced, they had to reinvent themselves. They still use fuel to attract customers; however, their profit comes from the sale of convenience items – food, drinks, etc. Blockbuster thought it was in the movie rental business instead of the entertainment business.

Change is always just around the corner. Markets change. Customers’ needs change. Economies change.

And innovations disrupt industries.

When your customers’ needs change, how you respond to those changes determines, in large part, the fate 40

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“So, as pawnbrokers, we must ask ourselves: What business am I really in? If you said the money business, you are only partially correct. You are in the business of creating remarkable customer service experiences.” of your business. The railroads needed to scale up and think transportation instead of just railroad tracks, locomotives, etc. Yes, they had mastered the railroad business, but they failed to prosper in a changing environment.

So, as pawnbrokers, we must ask ourselves: What business am I really

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Nordstrom Costco Amazon Chick-fil-A

Each of these companies is known for their customer service in different ways. Nordstrom is known for its return policy. Amazon is known for product selection and ease of use/ buying. Chick-fil-A is known for friendly service and consistent product.

Notice I labeled it as remarkable customer service. Why? If your business depends on referrals, as every business does, then you want to provide customer service that is worth making a remark about.

This is one reason why it is so important for companies, including pawn, to look at other industries and learn from them. Over the years, we have had some great opportunities to learn from some remarkable companies during Pawn Expo.

At my first Pawn Expo, Joseph Quitoni, Corporate Director for Culture Transformation at the RitzCarlton, presented a session on “Customer Service Reenergized”. At first I thought, “What does the hotel industry have to do with running a pawn shop?” Quickly, I learned there were some deficiencies in our customer service at iPawn Arkansas.

We weren’t remarkable and I wanted to take our pawn business and our customer service to a remarkable level.

Here are just a few of the things I learned during this Pawn Expo that took our business to the next level: n Stop thinking of those who

patronize your business as customers and start identifying them as clients. This one change in verbiage will change the way you think of your business, your employees, and those they serve.

Having a “customer” mentality is very transaction oriented.

But when you label those who are doing business with you as “clients”, you will become more relationship oriented. And that is what you want, a relationship with those who are supporting your business. They are more loyal and less focused on price. n All Ritz-Carlton employees have

authorization to spend up to $2,000 per day on a client. Again, they are already authorized, so they do not have to seek permission. As soon as I returned to our stores, a new policy was implemented. Any Sales & Lending Associate (SLA) in iPawn Arkansas now has the authority to help a client who is truly in need and has nothing. They can take up to $50 out of their drawer and give it to the customer. Naturally, we have stop-gaps in place to avoid abuse; however, in the past four years we have given $50 away twice. The SLAs are actually more intentional about helping clients find the money they need. n “Green and clean” is another

initiative we took to the next level.

Our parking lots are checked twice daily for trash and debris.

The inside of our stores are clean and our products are neat and well organized. n Our staff is easily recognizable

with their store-branded polo shirts/pullovers and khaki pants.

This leads to consistency in our branding process.

Each year at Pawn Expo, we have the opportunity to connect and network with pawnbrokers from around the country, which is one of the most important aspects of our annual convention. However, don’t underestimate the benefit of learning from other industries and businesses to “reinvent” aspects of your business.

You will be glad you did, and it will keep you and your business fresher.

See you at Pawn Expo 2018!

THE TRENDZ

WE BUY

TURN YOUR DIAMONDS INTO CASH MELEES LARGE STONES BROKEN, CHIPPED, EVEN BURNT DIAMONDS as well as UNWANTED JEWELRY

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business solutions

Dressing the Part

by Steve Fowler

I

t never ceases to amaze me just how easy it is to enter a business and wander about at will. Many staff members, no matter the business type, will overlook someone they don’t know or who doesn’t look like they belong, especially if that person is dressed in a manner that would suggest some level of importance or authority.

Over the years, I’ve taken many pawnshop staffers and owners to lunch or dinner at big and busy restaurants. I’ve worn a dress shirt and tie for most of my adult life. Those tools serve me well in demonstrating to my guests just how easy it is to wander about a business without being questioned. I do cheat a little by identifying the manager and avoiding that person.

Trying to look both important and intimidating, I’ll tell my guests to watch and learn, and then I’ll get up and walk directly into the kitchen. While inside, I’ll often cross my arms and look about as if doing an

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“For some reason, a tie sends messages at many levels.” inspection. I’ll try to have a small notebook with me and I’ll take notes and do my best to look like I belong.

I avoid lingering too long.

I’ve NEVER been stopped or questioned when doing one of these demonstrations – and I’ve done them many, many times. I won’t do them when I’m not wearing a tie. For some reason, a tie sends messages at many levels.

Once, when traveling through Iowa with Nathan, the district manager from a large privately held pawnshop chain, I decided to expand my game. We stopped for gas at a small truck stop on the side of the highway. It probably had a dozen or so gas pumps. We filled up with gas and went inside to pick up a few snacks. Upon entering I noticed a single employee behind a cash register and about a dozen people waiting patiently in line. As we approached the front of the line, I noticed his register was opening and closing as he took care of business.

There was also an open cash register, within easy reach of the customers.

It was approximately two feet to the left of the clerk and barely within the periphery of his vision. I could have easily reached in and removed a few bills. If someone were to distract him briefly, on his other side, I could have emptied the register of all the bills. Of course, an honest man would never do such a thing, but his indifference to good security gave me an idea.

I told Nathan to watch and learn.

As usual, I was wearing a necktie.

I circled away from the counter, approached the clerk from behind, and stood directly in front of the open register. He glanced over and noticed me staring at him with an intimidating confident demeanor.

He continued serving his customers and tuned me out after a time.

Nathan watched in disbelief. I stood there for a couple of minutes before wandering away.

I used that example to underscore my concerns about staff members in the stores he managed. I’d previously gone behind the counter and into the back room of several of his locations, without staff resistance, and before those staff members learned I was from the corporate office. I told Nathan to reinforce the need to ask questions with his staff.

I also shared a true story with him that involved my wife, Tracey. She worked in a large high school and had been to a number of securityrelated meetings where, among other things, Columbine High School type shootings/scenarios were presented.

School staffers were told to stop and ask questions of anyone carrying items that seemed out of place.

This included individuals who didn’t look like they belonged, seemed suspicious in any manner, or were unknown to the staff member.

Tracey was sitting at her desk near a window and noticed a man outside, wearing sunglasses and a baseball hat pulled down low. He was also wearing a backpack. She stepped outside and asked him if she could be of assistance and inquired about WINTER 2017

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his business at the high school.

The man confessed that he didn’t belong there and was a member of the media who was testing several schools to determine whether or not they were taking security seriously.

The story ran on the evening news and my wife was mentioned as the only person who stopped the television reporter as he wandered the various school facilities.

Persons having real authority, or who possessed authority at one time, will often take advantage of pawnbrokers and use that authority to gain access to the back room of pawnshops. Once, while visiting one of my own stores, I found two uniformed police officers walking down the aisles in our collateral storage area looking at client property. They were discussing their surprise at the mix of valuable items located on the shelves. The staff didn’t confront them. The police officers took the liberty of wandering around at will and unescorted.

The officers didn’t hear me approach and were not aware I overheard their conversation. I cleared my throat and asked what business they had in my store and who gave them permission to enter the back room. One of them was pretty cocky and said he didn’t need permission to enter my back room because he was doing his job. I asked, “What, specifically, brings you here today?” One officer told me they were looking for stolen merchandise. When pressed, neither officer could tell me anything in particular they were

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business solutions

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seeking, didn’t have a specific theft they were working on, and didn’t have any case numbers. Again I pressed and asked them their business.

Again the same officer said they were looking for stolen merchandise.

I asked how he would identify something as stolen just by reviewing my shelves for something they didn’t know they were seeking. He barked, “We’re watching you!” They both stormed out. I reported their actions to Jim, their Patrol Sargent, who happened to be a longtime friend of mine. Jim knew I operated an honest business and made certain his boys didn’t cross that line again.

On another occasion, I entered a store I was managing in the southwest and was told by one of the staff members that a detective was in the vault looking at firearms. I went inside the gated, and presumably secure, area. I asked him his business and he flipped out a badge and stated, “Police business. I’ll be done shortly.” I asked for a closer look at his badge and he reluctantly held it out once more. The word “Retired” was clearly engraved across the face of the badge. When pressed, he told me he was a gun collector and wanted to see what merchandise might be coming out for sale. I informed him that, as far as I knew, none of them would be coming out for sale. I told him that every gun in that vault was the personal property of our customers and, if he didn’t move his carcass out of the store immediately, I would notify both the police department and the press that he was on my premises impersonating a police officer. I informed him he was not welcome on the premises ever again and if he returned we’d contact the authorities.

Once he left, I wrote up a couple of staff members for allowing the retired officer to enter an unauthorized area.

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I’m very serious about protecting the property of customers.

Even when coached and encouraged to stop strangers located in unauthorized areas, staff members will often fail to react with appropriate authority.

These security shortcomings can be overcome by engaging in regular training exercises involving roleplaying. Doing so will increase the staff ’s confidence in handling these situations. I encourage every single possessory lender reading these words to take the time to train their staffs about the seriousness of this matter. Inspecting staff compliance with internal security measures is extremely important.

Send in trusted individuals, not known by your staff, to probe and test staff members. Be absolutely certain you carefully design the exercise so that it doesn’t place anyone in danger. Make certain that whomever you send to test your security measures does not reflect a threatening demeanor or convey a sense of potential danger to your staff. Be certain you follow up and address security failures discovered during the exercise.

Pawnbrokers: You have, in your possession, the property of others, as well as your own property and business assets. You also have a responsibility to take every reasonable measure to ensure the well-being of your staff. Please take the matter of wandering intruders seriously.

This article was previously published on Steve Fowler’s blog.

Business consultant Steve Fowler is a former multistore pawn store owner and previous member of NPA’s Board of Directors.

His pawn industry experience includes senior management responsibilities with Pawnbroker.com and Mister Money Holdings.

For more information, visit SteveFowler.com.

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compliance

Anti-Money Laundering Regulations and Credit Cards How to comply with processor requests

By Jerry Coyne

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ransaction laundering is a growing threat to the payments industry primarily through credit cards, gift cards, prepaid cards, and fraudulent merchant accounts.

Transaction or money laundering violates both the merchant’s agreement with its acquiring bank and, potentially, a number of federal and state laws, including the U.S. anti-money laundering (AML) laws.

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In 1970, the U.S. Congress passed the Currency and Foreign Transactions Reporting Act, also known as the Bank Secrecy Act (BSA), which established specific recordkeeping and reporting requirements to combat money laundering. Other laws have been passed to further enhance the BSA, including the Money Laundering Control Act of 1986, the Money Laundering Suppression Act

of 1994, and, most significantly, the PATRIOT Act of 2001, which sought to fight funding of terrorist organizations. Additional regulations have been released periodically from the Financial Crimes Enforcement Network (FinCEN) of the U.S. Treasury Department, which is the U.S. regulator for AML regulations.

Building on the existing legislation, the federal government has for the

last several years been intensifying its focus on money-laundering activities with additional regulations.

In 2015, financial institutions and credit card processors started to put in place expanded requirements in their AML programs to further strengthen their abilities to know and better understand their customers and their business expectations. The intention of the changes is to detect and prevent money laundering, and to comply with all government AML policies and procedures. The extra measures help protect all customers from becoming victims of moneylaundering crimes and any potential associated federal investigations.

In July 2015, MasterCard announced that it would provide incentives to monitor and prevent transaction laundering through a new program that was launched. This action was just one of several that have taken place in recent years by credit card companies to crack down on illegal activity and to maintain the integrity and reliability of their networks. As a result, some processors have been hit with considerable financial penalties and have even been banned due to a lack of implemented measures to keep non-compliers out of the payments system.

Transaction launderers essentially tap into the payment ecosystem by using a storefront merchant account to process transactions. Fraudulent merchants are able to funnel unauthorized transactions through legitimate payment networks while avoiding detection, not only by regulators, but even by the payment processors themselves.

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laundering is often used to process payments resulting from criminal activities. Transaction laundering opens the door to legitimate payment systems for money launderers of all sorts: criminals, tax evaders, and merchants involved in shady business practices and financing acts of terror.

Although regulators constantly enact ever-stricter policies, AML rules and regulations have not adequately adapted to the growing magnitude of e-commerce and the associated growth of the payments ecosystem. Current regulations and mechanisms have traditionally focused on lines of business, such as financial services; cash-intensive businesses; and products, such as cash deposits, wire transfers, and securities trading.

E-commerce payments using credit cards, among other means, are rapidly growing, and this growth creates opportunity for criminal enterprises to abuse the legitimate payments ecosystem.

How Does All of This Affect Me? Odds are, if you have processed your credit card transactions with the same company since before 2015, you probably have not heard too much about AML regulation changes nor have you had to take any action.

However, if you have changed to a new processor for your payment processing or had to respond to what is called a “business related activity” or an “event driven request”, you have had to provide more background information on your company and yourself than you have in the past.

The new regulations require the processor to obtain additional

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compliance information and there are no exceptions allowed by law.

Depending on the nature of the event, customers are sent a request form to complete and asked for confirmation of information already on file or for more information which had not been previously supplied.

Some of the activities that prompt further requests for information include, but are not limited to: n n n n n

Doing Business As (DBA) change Ownership change Authorized signer change Processing limit increase Adding electronic check service

(ECS) to an existing account

amounts, customers or items, from historical practices Can I refuse to provide the requested information?

In line with new FinCEN rules that will become law at the end of the year, there are no exemptions for customer refusal.

How long do I have to respond before action is taken and is a refusal considered a response?

For event-driven requests, you have 30 days from the time of first request to provide the required information.

Refusal to provide the information is not an acceptable response.

Typically, if you don’t respond to the requested information within 30 days, the account will be closed by the card processor unless there is an approved extension, which is rare.

AML regulations have clearly changed and more information is required by law, but your service representative will be available to guide you through the process to you set up your account or to respond to the AML request for additional information.

n Merchant Category Code (MCC)/

Standard Industrial Classification (SIC) code change n Marked change, in terms of

Jerry Coyne is a Managing Partner for Paysouth Merchant Services, an NPA Business Solutions Partner and can be reached at jcoyne@paysouth.com

What are the ramifications of refusing to provide the information?

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compliance

FBI Criminal Justice Information Services (CJIS) Division

National Instant Criminal Background Check System (NICS) Section News NICS E-Check Recent Changes and Enhancements

T

he NICS Section strives to make the user experience as positive as possible. Since the new NICS was introduced on August 9, 2016, the NICS Section has received input from Federal Firearms Licensees (FFL) regarding ways to improve the user experience. Based on that input, over the course of the year, modifications have been made. The largest enhancement was introduced on September 6, 2017, which provided a new, easier-to-follow firearm background check search screen. This new search screen eliminates much of the blank space and facilitates easier navigation. In addition to the new look of the background check search screen, the following features have been added.

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n Predictive Typing

A predictive typing feature has been added to the State of Residence, Place of Birth, and Country of Citizenship fields. This feature is designed around the two-digit state or country abbreviation. This field can be populated by entering the two-digit abbreviation or by entering the first letter of the abbreviation and then selecting from the options. (This is most helpful when you are not sure about the abbreviation). n Height

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The proper format in the height field is three characters only. For example: Six foot should be entered as ‘600’ or five foot nine inches should be entered as ‘509.’ An example of this format is now listed in the height field.

n Date of Birth

The date of birth can be entered in one of two formats. If entered with slashes, the format must be as follows: mm/dd/yyyy; however, if you prefer to enter the date of birth without slashes, it can be entered using the following format: yyyymmdd. The system will automatically convert the date of birth to the proper format. n Social Security Number

The proper format for this field is without dashes. An example of the proper format has been added to this field as well. n “Reopen” Button

When administrative users are making edits to accounts, they must click on the Reopen button prior to making changes. The font for the Reopen button has been increased to make it more noticeable. n Password Expiration Countdown

The number of days until your password expires is displayed at the top of the page. n Password Reset

When the administrative user resets the password for another user, the temporary password will be highlighted yellow to increase visibility. n “Previous” Button on Verification Page

When verifying the descriptive data entered during the search, this button will allow you to quickly return to the Search page to make corrections. n Adding New Users

The NICS Section changed the functionality that allows you to add new users. These changes eliminated unnecessary pages making this process more efficient.

Additionally, the username and temporary password are highlighted yellow to increase visibility. n Last Time Logged in Message

The date you last logged in will display at the top of the page. Each person must have their own username and password. This is useful in determining if someone else has obtained your account information and logged in using it. If this has happened, you will want to change your password immediately. Note: This change had not been deployed as of October 1, 2017; however, it is expected to be released soon.

Please note the NICS Section is actively working to implement additional enhancements.

If you have suggestions for ways to improve the NICS background check experience, please e-mail the NICS Section’s Business Relations team at nicsliaison@fbi.gov.

Contacting the NICS Section

Reminder: The best way to receive assistance from the NICS Section is by accessing the FFL website at www.fbi.gov/services/cjis/nics/ resources-for-federal-firearms-licensees. Once you access the FFL website, locate the “Assistance with NICS Processing” Section and click on the link that states “New: Ask the FBI NICS for Assistance.” This link opens a form that you will complete and submit to the NICS Section.

If you prefer to contact the NICS Section by telephone at (877) 324-6427, you may still do so on a limited basis. The NICS Customer Service line is available from Tuesday through Friday (excluding holidays) from 12 p.m. – 5 p.m., eastern standard time. However, the Customer Service line will be disabled during times of high volume. During these times, the method of contact for Customer Service assistance will be solely through the form on the FFL website.

The Customer Service telephone line is to serve our FFL customers. Due to privacy issues, the NICS Section cannot support inquiries from customers having questions regarding their delay, denial, or appeal. Since the NICS Section cannot assist with these types of inquiries, please do not provide the Customer Service telephone number to your customers. The NICS Resolution Cards can be provided to customers who have been delayed or denied. The NICS Resolution Cards can be ordered by visiting the NICS FFL website at www.fbi.gov/nics-ffl.

NICS E-Check Volume

The NICS E-Check continues to be the preferred method of contact by most FFLs as the NICS E-Check volume continues to increase every year. The NICS E-Check usage percentage in Fiscal Year 2016 was 73.29. The NICS E-Check usage percentage in Fiscal Year 2017 was 79.95. If you are not enrolled in the NICS E-Check, please contact us if you need assistance with setup.

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WINTER 2017 Garrett_NovDecJan_2018_half_page_ad.indd 1

9/29/2017 8:53:15 AM

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Leading With GRIT

by Laurie Sudbrink

Inspiring action and accountability with generosity, respect, integrity, and truth

W

hether you’re an employer or an employee, Leading With GRIT is a guide to improving your attitude and eliminating workplace misery. Follow Laurie Sudbrink’s GRIT™ principles of Generosity, Respect, Integrity, and Truth, and learn how to reinvent those negative feelings transforming your business or workplace into a sharing, caring, and productive environment.

In the book, you’ll learn: why the GRIT™ principles are so effective how your attitude affects those around you why a positive attitude produces less stress and higher productivity how to become a better communicator

n n n n

Leading With GRIT will help you become a better leader and retain employees longer. Her practical advice and step-by-step guidelines are a must-read for a happier and more productive working climate.

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certified pawn professional

Should You Get Certified?

W

hen you see the initials “CPA” behind someone’s name, you know the owner put in a great deal of time and effort to acquire them. The same goes for other professional certifications. The person whose name is followed by certification initials voluntarily took the time to complete the required coursework, were tested on their ability to understand the course contents, and most likely paid a fee to do so.

The Certified Pawn Professional (CPP) designation was created to elicit the same reaction. It verifies your knowledge, skills, and abilities as a pawnbroker and is the pawn industry’s official recognition of achievement.

So, why should you get certified if you’re already doing the job? Below are nine great reasons:

1

It demonstrates your commitment to your profession.

Completing a certification shows your boss, employees, peers, and your customers that you are dedicated to being a pawnbroker. You are prepared to follow a set of industry standards and best practices that have been designated as the best and correct way to conduct business.

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2

You will be better prepared for on-the-job changes.

Having increased exposure and knowledge about marketing, store operations, human resources, federal regulations, security, and pawn products gives you a leg up on your peers. You have been made aware of the latest industry changes, and you have the tools and resources to quickly adapt to them.

3

Your customers will have greater confidence in your ability to do your job.

Certification shows your customers that you hold yourself to the highest professional standards.

They, in turn, will have greater confidence in your ability to do your job and expect you will treat them fairly and respectfully.

4

You will be more productive.

Studies by organizations, such as Microsoft Office’s 2012 Specialist Productivity Study, show that certified employees are more productive.

They are better prepared to handle the day-to-day obstacles and have the skills and knowledge to work more efficiently.

5

You will gain peace of mind knowing you’re following industry standards.

There will be no more wondering, “Is this how other pawnbrokers do it?” The CPP program was created by pawnbrokers and other industry experts specifically for pawnbrokers. When you have earned your CPP designation, you’ll know you’re doing what the best in the pawn industry are also doing.

6

You will attract respect from your peers.

Your co-workers and other industry professionals know what you have to do to earn that certification. They will respect you for having the drive and perseverance to achieve it.

7

You will gain a sense of personal accomplishment.

As a graduate of the CPP program, you will feel pride in your ability to fulfill all of the requirements. Plus, you’ll have more confidence in your understanding of the job and what it requires.

8

You will differentiate yourself from other pawnbrokers.

Not everyone wants to get a professional certification.

Those who do, however, demonstrate their emphasis on their career, their business, and their customers by wanting to be the best they can be in their profession.

9

You will be more valuable.

When your boss sees that you have made the commitment to enhance your education and skills by getting certified, they know you are committed. That, in turn, makes you a more valuable employee. More valuable employees usually command a higher income level.

The time and effort required to earn your CPP designation will help you for years to come. If you take just two courses a year beginning in 2018, you’ll earn your CPP designation by 2020!

CPP courses are offered throughout the year in different locations. The cost is $199 per course for members, $499 per course for non-members.

Members must complete five of six courses within a three-year time frame to achieve their certification. For a complete listing of the courses and schedule, visit NationalPawnbrokers.org and click on the CPP tab.

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member benefits

What Are the Pawn Laws In…?

n governing agency for pawn

regulations (licensing or regulatory) n a link to the pawn statutes or pawn code n name and email for the state

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association president or NPA state contact The map is updated monthly by the NPA staff. If you find a missing or broken link, please email Brittany McCorkle at Brittany@ NationalPawnbrokers.org.

Diam INC.

If you want to know what the pawn regulations and statutes are in your state, you can find the information with just a few clicks on the NPA website (NationalPawnbrokers.org).

The Pawn Point Map is located on the home page in a blue box. It provides a state-by-state listing of the pawn regulatory authority, the state’s pawn statutes, and a contact for the state association, if there is one.

When you click on the box, a map of the U.S. will pop up. You can click either on the push pin in your state or on the state name listed in the left-hand sidebar. Once you do that, a listing will come up with the following items, if they are available:

Stephen Foster President Fresno Coin Gallery California Pawnbrokers Association Board of Directors

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Help NPA advocate for the pawn industry.

SAVE THE DATE

APRIL 24-25, 2018

2018 NPA Legislative Conference Legislative Conf. 2018 Ad

Hamilton Crowne Plaza, Washington, DC

NationalPawnbrokers.org/legislative-conference

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member benefits

National Pawnbrokers Association New Members August 1 – October 31, 2017 PAWNBROKERS Arizona Liberty Pawn & The Jewelry Buyers • Mesa Virginia Bargain Pawn • Christiansburg

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(From page 1)

Reflections and Reassessments

dedicated pawnbrokers who have consistently told their story time and again, we would not have had the successes we have. In the arena of politics, so much is done based on relationships and, thankfully, we have spent the last 30 years building those relationships.

I vow to work with the NPA board and staff as we move into 2018 and assess where we are as an association and determine what we need to do to make sure the association is relevant for many years to come. I am thankful for the pawnbrokers who choose to support the NPA through membership, the vendors who have supported us through the good times and bad, for our staff who work tirelessly to provide the support we need when we need it, and for the pawnbrokers who came before me and laid the foundation for our association. Without their leadership, we wouldn’t be in the sound fiscal shape we are in today.

I look forward to working with members and nonmembers alike to provide education and training in addition to providing leadership in all aspects of the pawn industry. Reach out to me (Tim@Pacerltd.com) or any other board member with questions or suggestions to keep our industry viable. Make sure we stay in touch with you, the pawnbroker, as we embark on the next chapter in the book of pawn.

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state news

ARKANSAS

ILLINOIS

Arkansas Pawnbrokers Association tim@pacerltd.com

Illinois Pawnbrokers Association arlingtonloan@gmail.com

Act 985, the Pawnbrokers Licensure Commission Act, by law was set to go into effect this past July.

The Arkansas governor was unable to make the five appointments to the commission as early as we would have liked; therefore, the commission didn’t meet for their orientation until late October. This has slowed the process of creating new rules and regulations for the pawn industry in Arkansas. The Arkansas Pawnbrokers Association (APA) was pleased with the appointments of Douglas Braswell, Braswell & Son Pawnbrokers in Little Rock, and Traci Lewellen, A & B Pawn & Jewelry in Van Buren, to the commission. They are joined by two law enforcement officers and an attorney.

The commission is set to meet on a regular basis until comprehensive rules are passed to address licensing, procedures, fees, confiscations, and holds as well as continuing education. There is no time table in place to address all the concerns, but we are optimistic some of the new rules and regulations will be in place before the end of 2018.

The Dixie Pawnbrokers Educational Conference & Trade Show is set for the weekend of April 13-15, 2018, at the Marriott Resort in Little Rock. Because of the location, the APA is hoping many first-time attendees will take time to attend. With many small mom-and-pop shops in Arkansas, travel distance and store closings during normal business hours has been a hurdle for some in attending past Dixie shows. We look forward to our neighbors from Louisiana, Mississippi, and Alabama as well as pawnbrokers from across the Midwest and south attending the show and treating them to some good old southern hospitality. Contact Tim Collier at tim@pacerltd.com or call him at (501) 666-2883 for more details.

At the Illinois Pawnbrokers Association (IPA) meeting this past September, we discussed how best to increase membership, but more importantly, how to increase member participation. Every time we have a legislative change, members and nonmembers alike ask me to explain how the changes came about and how to proceed. I am always amazed that pawnbrokers don’t see the value of taking two Sundays out of the year to get involved in the industry that puts clothes on their back and food on their table. The IPA is always looking for suggestions and ideas to better the industry. Why wouldn’t you want to make a difference? Our next meeting will be held on Sunday, March 4, 2018, at the I Hotel and Conference Center in Champaign, IL. The membership also voted to continue offering reimbursements to any current IPA member that will be attending the NPA Legislative Conference in Washington, DC. The IPA will reimburse members up to $300 per day with the total IPA cost not to exceed $3000. Last year, we had six pawnbrokers representing Illinois, and I would like to see us exceed that number this year. The 2018 conference will be held on April 24-25, 2018, so mark your calendar. Visit the NPA website for more information on the conference schedule.

We also discussed the legislative changes to the Illinois Pawnbroker Regulation Act that we are seeking at the fall session in Springfield.

Tim Collier, President

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INDIANA

Indiana pawnbrokers have been working to get to know their elected officials and this simple “friendly” relationship resulted in a call about a problematic bill in the Indiana Senate. The caller offer assurance that, until things worked out, the bill would never hit the floor. This is huge. I cannot tell you how bad things could have been without this friend, but this is something that money cannot buy. You make your friends by nurturing a common interest and elected officials are no different.

Greg Engstrom, President Indiana Pawnbrokers Association gregengstrom@hotmail.com

The biggest change in Indiana this year is the long fought-and-won battle allowing handgun loans, as Indiana was one of only five states in the nation to not allow handguns to be used as collateral. The next legislative session is right around the corner, and rumor is that there is nothing new planned that will affect our business. However, there are several areas of the law that are still problematic.

At our last board of directors meeting there was a lot of discussion about rogue police officers taking items from the possession of the pawnbroker and immediately giving them to an alleged victim. Some areas have great relationships with law enforcement, but it only takes one who is not following the law to sour that connection. We have to start working on changing this monumental task, and it will likely take many years to complete.

The board also discussed the insurance of pawn shops – not casualty, robbery, fire, or act of god insurance, but assurance insurance. This is what is done proactively to protect the way we do business and keep the various legislators, city councils, and other elected officials informed about what pawnbroking is all about. It is important because, without a friend who is a pawnbroker, people may get their information about pawnbroking from television or, worse yet, movies. Since this is an “off year” for the election cycle, things are a little less hectic and more of these elected officials will be having chili suppers, town hall meetings, open office hours, and other events that anyone can attend. This is the time to get to know these officials, and their staff, not for the purpose of handing them support checks, but to really get to know them. When they have questions, they will know who to call because they have a friend in the pawn business.

NEW YORK

Eric Modell Collateral Loanbrokers Association of New York eric@modellfinancial.com

The Collateral Loanbrokers Association of New York (CLANY) recently held its summer meeting which was graciously underwritten by Marshall & Sterling and STS Refiners. Spirits at the meeting were subdued as we recognized the loss of our past president, Mitchell Kaminsky. Our thoughts and prayers are with the family after this tragic loss.

As previously reported, New York members are now required to submit certain data to LeadsOnline. Our litigation against the city is ongoing, and the timeline is long. Since the Appellate Court reversal of our favorable decision, operators continue to report that the New York Police Department and Department of Consumer Affairs are continuing to visit shops and make varying demands with regards to our records. Many are receiving violations and warnings. However, different precincts continue to handle operators in different ways. Operators in New York are encouraged to reach out to the association and let us know about their experiences.

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state news

OHIO

SOUTH CAROLINA

Ohio Pawnbrokers Association raph@tedspawn.com

South Carolina Pawnbrokers Association bondedloan@gmail.com

The Ohio Pawnbrokers Association (OPA) would like to remind all Ohio pawnbrokers that the current licensing period will end June 30, 2018. You will need to be in compliance on your continuing education (CE) hours by then but do have the option to follow the old standard (12 hours plus eight hours per additional location with three or more employees) or the new standard (eight hours per location). You cannot split the law; you must choose one or the other since the new code section went into effect in the middle of our license period. If you have questions, please contact me or the Department of Commerce.

The OPA meeting this past September included an interactive diamond lab that was presented by Ritchie Grampp and associates from Bluestone Trading which was a big hit with all who attended.

We plan to present one additional four-hour continuing education seminar sometime in the spring or early summer. Details will go out in late winter or early spring.

We are still waiting (and hoping) for a favorable decision on the appeal of the Liberty Coin case. An email will go out to membership as soon as the decision is released.

The pawn industry in South Carolina is alive and challenging. With the passage last year of major legislation that provided a comprehensive update to the South Carolina law governing the pawn industry, the South Carolina Pawnbrokers Association spent 2017 focusing on efforts to engage former association members and recruit new members.

During that time, a piece of legislation was introduced in the House that would cause pawnbrokers to prorate loans for items redeemed before their term. In South Carolina, we are not allowed to charge any fees, only interest. The bill stalled in the 2017 legislative session, but we anticipate movement in 2018. Because this bill reduces potential revenue to pennies on each loan redeemed early, this legislation could be devastating for the pawn industry in our state and we plan to do everything in our power to defeat it.

The annual membership meeting and dinner was held in Columbia, SC, on August 21, 2017.

It included ATF Industry Operations Investigator Suzanne Costello who conducted a seminar and question and answer session dealing with firearms acquisition and disposition record books and changes in the 4473 form.

The next meeting is planned for January 2018 with a goal of association membership and leadership expansion.

Raphael Tincher

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NEW NPA ONLINE COMPLIANCE PROGRAM For Pawnbrokers and Dealers in Precious Metals

Protect Your Business DID YOU KNOW… NPA offers an online anti-money laundering program that allows you to get all your compliance training requirements without ever leaving your office. The self-paced course, “AML for Pawnbrokers and Dealers in Precious Metals”, will teach you how to properly file an 8300, OFAC requirements, when to file a Suspicious Activity Report, and more.

Avoid fines and stay in compliance. Visit NationalPawnbrokers.org/Compliance for more information on this important training course.

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(From Page 64)

Saying Good-Bye Is Never Easy

experiencing both parental barrels when it comes to homework, tests, class projects, extracurricular activities, dressing, breathing, etc.

Now the new normal is starting to kick in. A phone call each day has turned into one every other day and she’s talking less about coming home and more about sorority events. She’s going to football games and hanging with her study group. At least that’s what she called it. I’m thinking the word “study” is used purely to pacific her mom and me.

Did I buy a Texas Tech magnet for my car? Sure. Did I attend several Red Raiders football games this season? Sure. Did I actually cheer for a team I never thought about in the past 50 years? I tried my best, although like any true sports fan, it’s really hard not to think you’re being a bandwagon fan at moments like this.

Did I buy one of those obnoxious window stickers that say “My Money & My Daughter Go to Texas Tech”?

No, I did not.

But my daughter and my money do go to Texas Tech. And I think I’ve finally gotten my mind around these facts. Paying for college never has been more daunting. Back in the Stone Age when I went to college, a four-year tab was nearly the same as one year runs you today. Private schools are more than double what I’m paying, which begs the question – did these parents win the lottery, rob a bank, or sell their Mickey Mantle collection?

A friend of mine’s daughter recently decided against a full ride scholarship to the University of Texas and, instead, chose to attend a private school in the Northeast.

Interesting decision. He now has an annual tuition payment of $70,000. Yep, you read that right.

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Pretty sure I would have won that debate by buying her a Land Rover and whatever other bribery made sense.

So thanks, honey, for choosing an in-state public school that I can afford without having to dive into my Nolan Ryan memorabilia.

And thanks for calling occasionally.

And thanks for not bringing your laundry home. For the record, I’m not really getting used to you not being upstairs on your phone every night. And I’m not really getting used to you not arguing with your brother over which video game to play. And I’ll never get used to having you live so dang far away.

Then again, I guess that’s why they call it growing up. At some point maybe I will.

Rudy J. Klancnik writes for fun, sells stuff for a living, and cheers for any team playing Ohio State or the Yankees.

(From Page 33)

A Guide to Grading Diamonds Set in Jewelry

To grade the color of a diamond that is in a mounted setting, you will need a set of masterstones.

Masterstones are real diamonds obtained in sets from the GIA with their precise color indicated.

There are also synthetic diamond masterstones available.

Once you have your set of masterstones, with tweezers, hold a masterstone close to the mounted stone without touching it.

Under 10x magnification, compare corresponding areas of the crowns of the two stones. Repeat this process using several masterstones, as your comparison measure, until you find a color match. When working with mounted stones that are less than 20 points, you should assign a range of two color grades.

Cut

The final element assessed should be cut. The type of setting that the diamond is in affects how easy it is to evaluate the cut of a diamond.

The more of the diamond that is covered, the more challenging it is.

To evaluate the cut of a diamond, use table %, depth %, and overall symmetry. Table %, for example, is calculated using the following formula:

formulas above — and always being conservative in your estimates — can help to ensure that you buy or loan in a way that maximizes your profit. Be aware that stones can be damaged if you attempt to remove them from their setting. If removal is necessary, it is advised that you consult a jeweler.

Table % = width of table divided by width of diamond

If the table percentage is high, the diamond is likely shallow; if it is low, the diamond is likely deep.

Neither of these is desirable. A table percentage between 56% and 61% is preferred.

Carefully examining a diamond set in jewelry and applying the

If you are unsure about your evaluation, would like a second opinion or simply have questions, contact the experts at White Pine Trading for a free evaluation so that you can continue to loan with confidence.

White Pine’s experts buy all sizes, shapes and qualities of diamonds, including broken and chipped. If you have diamonds or diamond jewelry that you would like to sell, schedule an appointment with their experts by phone: 646-791-3777 or email services@ whitepinediamonds.com.

YOU’VE GOT THE KNOWLEDGE, EDUCATION, AND SKILLS. NOW PROVE IT. Douglas Braswell

Get your Certified Pawn Professional designation: • Validate your experience • Show your commitment to the industry • Stand out from the competition Courses include:

• Store Operations • Security, Risk, & Crisis Management • Marketing, Advertising, & Public Relations • Human Resources • Product Knowledge • Federal Regulations NationalPawnbrokers.org, click on the CPP tab

MEMBER RATE $199/cou rse NON-MEM BER RATE $499/cou rse

• (817) 337-8830

“Obtaining my CPP designation has been invaluable for me and my company. Combined with our marketing strategy, store design, and community outreach, the CPP designation fosters an image of trust and professionalism in the eyes of the public.” – Douglas Braswell, Braswell & Son Pawnbrokers, Little Rock, AR

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pawnder this

Saying Good-Bye Is Never Easy

by Rudy J. Klancnik

H

ave you ever taken your cute little puppy to the kennel before heading out for a vacation? And then glanced back as you walked out of the door to see the little guy crying as if you’re abandoning him for life instead of just a long weekend? Yeah, it always hurts a bit. Of course, you get over it the moment you board the flight, see the beach, and start diving into whatever umbrella-garnished drink is placed in front of you.

This is exactly how I felt when I dropped off my first born in Lubbock, Texas, for her first week in college at Texas Tech University . . . times one million. Man, that was tougher than expected. Then

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again, I have no one else to blame but myself. After all, it was my bright idea to encourage her to go away for school instead of 20 minutes up the road. On the five-hour drive back home, I certainly had second, third, and 25th thoughts on that decision.

Many of you have probably experienced the same sensation.

Some of you likely high-fived as you sped away from campus buffered by the awesome life accomplishment of sending a child to college. I cried as if I was watching the final scene from Field of Dreams (gets me every freaking time!).

My 13-year-old son hadn’t seen his dad cry until that moment.

Hopefully, it doesn’t scar him.

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Considering 10 minutes after leaving campus he was asking about moving his video game system and Nerf hoop into his sister’s now-vacant room, he’s adapting pretty well. He misses her, too, of course. They’re video game and trash-TV watching buddies, so although he’s putting on a tough-guy act, he misses her a lot.

He also misses her for another reason, one he’s already freely admitted to. Since he’s now the de facto only child, all the spotlight on school, sports, school, school, and school falls on his little noggin.

Sucks to be you, dude. With his sister tucked away in a dorm room hundreds of miles away, he’s (Continued on Page 64)

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calendar of events

FEBRUARY 2018 Texas Association of Pawnbrokers February 9-11, 2018 Wyndham Riverwalk San Antonio, TX Contact Peggy Roden: TAP@rmaus.net

APRIL 2018 Dixie Conference & Trade Show April 13-15, 2018 Marriott Little Rock Little Rock, AR Contact Rosemary Hipps: Larrysjp@comcast.net NPA Legislative Conference April 24-25, 2018 Hamilton Crowne Plaza Washington, DC Contact Dana Meinecke: Dana@NationalPawnbrokers.org

MAY 2018 Midwest Pawnbrokers Conference and Convention May 18-20, 2018 Galt House Hotel Louisville, KY Contact Ron Stempkowski: 1ipa@comcast.net

JULY 2018 Pawn Expo 2018 July 10-12, 2018 The Mirage Hotel & Casino Las Vegas, NV Contact Helen Moore: pawnexpo@NationalPawnbrokers.org PawnExpo.com

index of advertisers 3 CLiCk Media 64 (212) 365-0691 3clickmedia.com Aagam Creation LLC 48 (248) 961-0506 ABC Diamond Buyer 7 (586) 354-7274 abcdiamondbuyer.com Apperson, Inc 57 (800) 473-6761, ext 1224 apperson.com Atish Diamond 18 (212) 938-1005 Bluestone Trading Company Inc Back Cover (888) 800-BLUE (2583) bluestone-trading.com Bravo Pawn Systems 67 (888) 407-6287 bravopawnsystems.com Certified Pawn Professional (CPP) 65 (817) 337-8830 nationalpawnbrokers.org Di-Moksh Diam, Inc 55 (213) 479-3023 dimokshdiam.com Diamonds and Jewelry Services 20 (973) 303-8389 Dillon Gage 8 (888) 436-3489 dillongage.com Garrett Metal Detectors 52 (800) 527-4011 garrett.com Geib Refining 15 (800) 228-4653 geibrefining.com Gemological Institute of America 21 (800) 421-7250 gia.edu Hoover & Strong 5 (800) 759-9997, ext 164 hooverandstrong.com Initiative Consulting Group 58 (407) 960-4686 icggroup.org International Gemological Institute Inside Front Cover igionline.com Mid-States Recycling & Refining 45 (800) 551-0083 midstatesrecycling.com

Midwest Pawnbroker Convention 57 (219) 261-3173 midwestpawnconvention.org Padmavati Exports Inc 38 (212) 869-0544 padmavatiexportsinc.com Palak Diam 13 (213) 228-0077 palakdiam.com Pawnbroker Financing 45 (303) 373-1300 pawnbrokerfinancing.com Paysouth Merchant Services 49 (617) 578-9444 paysouth.com/partners/npa Rapaport Auctions 25 (212) 354-9100 rapaportauctions.com RMF Consulting Group 64 (866) 204-7209 checkconsultants.com Saumil Diam 52 (212) 575-3655 saumildiam.com Shri Diamond Inc 11 (212) 840-0650 Simplex Diam Inc 56 (212) 883-0888, ext 1007 simplexdiam.com Sparkle & Dazzle LLC 59 (212) 789-9088 sparklendazzle.com Stallcup Group 31 (817) 479-3880 stallcupgroup.com Star Buyers, Inc 30 (201) 720-1000 starbuyersinc.com Stuller, Inc 3 (800) 877-7777 stuller.com Surya Capital LLC 24 (800) 242-7766 diamondmelle.com The Trendz 41 (866) 337-7464 thetrendz.biz United Precious Metal Refining, Inc. 12 (800) 999-FINE (3463) unitedpmr.com Wexler Insurance Agency Inside Back Cover (800) 432-1853 wexlerinsurance.com Worldwide Diamond 63 (213) 622-2191 wwwdiamond.com

The NPA does not specifically endorse any entity including but not limited to exhibitors and advertisers; makes no representations, warranties, or guarantees; and assumes no responsibility for the products or services provided by these entities. The NPA expressly disclaims all liability for damages of any kind arising from the use or the performance of the products or services provided by these entities.

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