a news story by Franziska Kircher
Pawnshops in Amsterdam are noticing twice as many people in need of short-term cash. As a reason for this, they name the increasing inflation in the Netherlands. The Centraal Bureau voor de Statistiek(CBS) has reported twelve percent inflation in August.
Twice as many customers as usual head to the pawn shops in Amsterdam. Barry Heuperman is a pawnbroker at Pandhuis Amsterdam, a business with more than 70 locations all over the country. He has noticed recently that there are more people with a middle income wanting to pawn their belongings. “They are coming in because of the inflation and the high bills”, he says. In fact, he now serves at least ten clients a day, whereas a few months ago he had four to five customers a day, Heuperman specifies. That is a rise by 100 percent.
While Amsterdamers pawn, people in Alkmaar purchase gold
Besides pawning, Heuperman also buys and sells precious metals. He is not surprised that there is also greater interest in gold: “A lot of people do not trust the banks anymore, because the interest is so low. That is why they invest in gold because it is the only international currency that can’t be debased.” Heuperman suggests that the ability to touch their savings physically gives people a feeling of safety and control. “They invest 20,000 to 30,000 Euros in gold now”, he says. Compared to more stable times, they only invested 3,000 to 4,000 Euros.
Whether people invest or need to pawn their belongings depends on the area Heuperman works in. “In Alkmaar we see more people investing, whereas here in Amsterdam there is more pawning”, he explains. This can be related to the fact that Alkmaar is home to mostly young families, whereas Amsterdam has more single households. These are more often rented apartments and therefore more affected by rising prices due to inflation.
The age and social class of his pawn depositors vary explains Heuperman: “Some are in their mid-twenties others are seniors. It is not only people with lower income, but also more and more from the middle class.” They bring mostly precious jewellery, gold, or silver to the pawn house, so the salesman.
The reason why they want to pawn and not sell it right away is the emotional value the items hold to them, he explains. From his experience at least 80 to 90 percent collect their belongings after the pawning period of three months. Some people come in frequently, according to Heuperman. “It is almost like a circle. They pawn to pay their bills and collect their items when they receive their salary. It works for them”, he says.
The higher the inflation, the smaller the chances of collecting their pawns
However, due to the economic crisis, this circle might be broken, Heuperman fears: “People now don’t need the money for one big investment, but they need it to live and to pay for their groceries.” According to evaluations by the market researcher Growth for Knowledge (GfK), supermarket prices have risen by 20 percent compared to the same period last year.
The next months will show if people will be able to collect their pawned possessions again, Heuperman assesses. Otherwise, their former belongings go into auction or are melted down into new gold bars.