Maui Pawn Shop

The story of Kamaaina Loan And Cash For Gold, Maui’s largest and oldest pawn shop, begins, like all good adventures, long ago and far away.

A young banker, who had grown up in Brighton Beach, wanted warmer and quieter beaches, so Big Rich left Manhattan for Oahu.

It was a time of possibility. The price of gold, finally deregulated by President Nixon, was moving, eventually to reach all-time highs. A young man with a little capital and a tolerance for risk could try to ride that wave.

Big Rich had very little capital. In fact, he started out buying and selling gold from his car, but within a few years it developed into Kamaaina Metals, with branches all over Oahu. But Big Rich yearned for still more peaceful beaches, so he sold Kamaaina Metals and headed for Maui, then in the early years of its tourist boom.

A word about “kamaaina.” In Hawaiian it translates as “child of the land,” or native born. The original connotation was, “born here,” but some newcomers also adopt it as a signal that they wish they’d been born here.

Hawaii is a famously blended mix of ethnicities and cultures. Kamaaina Loan And Cash For Gold set out to offer pawn lending and precious metals buying and selling services to all of them, from the kanaka maoli (original Hawaiians) to the descendants of the Chinese, Japanese and Filipino plantation laborers to the Mainland Americans who migrated to the 50th State. And lately, to the latest wave of immigrants from Korea, Vietnam, Mexico, Central America, Canada, Australia, Russia. Anyplace, really.

It’s working. Kamaaina Loan And Cash For Gold’s active accounts total 10% of the entire adult population of Maui. There are other Maui pawn shops, but not one comes close to the number of repeat customers and volume of business that Kamaaina Loan And Cash For Gold has.

Today, Kamaaina Loan And Cash For Gold has about 20 employees, four storefronts along North Market Street in Wailuku and thousands of customers on the island, as well as nearly 10,000 successful auctions through Web Auctions Hawaii, its eBay Certified Trading Assistant and Internet store division.

It took 40 years of hard work to get here. Big Rich’s wife, Carolyn, who handles the banking, recalls that in the early days, $200 in cash would be enough for a whole day’s exchanges. In 2016, a small gold ring or slender chain can fetch $200.

In the past year, Kamaaina Loan And Cash For Gold has done deals as small as $1.70 (for some Olympic commemorative stamps) and as large as several hundred thousand dollars (to help settle an estate).

Not every transaction is profitable. (The deal for $1.70 in stamps certainly wasn’t.) But Big Rich says his real profit “comes from the ‘Bless yous’ he gets from clients he has been able to help.”

Cable television shows like “Pawn Stars” have made pawn lending and second-hand buying more familiar, but many Americans have never been in a pawn shop.

On the other hand, more than one American family in 5 does not have any kind of bank account. Pawn shops are the banks for the “unbanked.” And even for the banked.

Our customers range from judges and real estate operators to construction workers between jobs. From the ones who drive up in new luxury cars to the ones who come to us to raise bus fare so they can get to work.

Items we lend on range from Rolex watches worth $40,000 to an older model iPod worth $10. But as with virtually all other pawn shops, our Maui pawn shop’s main business is buying and selling gold and silver and other precious metals.

The world price of gold is set in London and New York. Every business day at 9 a.m. (10 a.m. on weekends), we check the New York spot price, and that dictates what we can offer for your gold ring, coin or tooth filling. It also dictates what we will charge if you want to buy a Kruggerand, bar of bullion or sack of Kennedy half-dollars.

Many people don’t understand this. A pawn shop doesn’t play the market. Big Rich says, “Gold will go up, or gold will go down, or gold will stay the same.” But which is something we have no way of knowing.

Our profit margin comes from a percentage of the New York spot price on each transaction.

This applies to a pawn loan as well as to a purchase. The difference (established by Hawaii state law) is that gold we purchase can be melted down after 15 days. Gold left as collateral for a pawn loan must be held 60 days.

If after that time, the borrower has not redeemed his pledge, the gold can be melted.

Here’s a secret many people may not believe: Pawn lenders want you to redeem your gold (or other collateral).

If you stop and think about it, it’s easy to see why.

If you leave your wedding band with us, and later redeem it, our expenses are minimal. We have to protect the ring in our vault, pay insurance on it, undertake the expense of bookkeeping and handling; but at the end, we receive our original money back plus interest, in cash.

We call ourselves Cash For Gold (a trade mark we own in the state of Hawaii), and that applies to cash out for gold, and to cash in for redemptions.

But if a customer doesn’t redeem his pledge, then we have to try to recover our money by selling it. Then, on top of the previously mentioned expenses, we have to maintain a store to display it in, and pay to advertise, and hire store managers to handle the sales, etc., etc. And maybe it won’t sell, or not for a long time.

This is not the case for recyclable gold. We sell to refiners every week, and they are always ready to buy. But gold jewelry that goes to our Jewelry, Art & Collectibles store at 98 North Market Street may take weeks to find a buyer. Tools, musical instruments and surfboards – things we take in every day by purchase or loan – are even chancier to sell. So, if anyone tells you pawnbrokers are trying to get their hands on your stuff so they can sell it for a huge profit, disbelieve them. Nothing makes a pawnbroker happier than a satisfied customer who comes in to pay off his loan and reclaim his jewelry.

Some people, especially the “unbanked” use their jewelry (or tools or whatnot) the way other people use a credit card. If they need cash, they plunk it on the counter and get cash.

It isn’t unusual of us to make a loan on the same piece of jewelry several times a year. Particularly for people whose income comes in fits and starts (think of real estate sales agents), having a few pieces of gold is – literally – like cash in the bank, thanks to their pawnbroker.

(One thing Kamaaina Loan And Cash For Gold does not lend on is firearms. Many Mainland pawn shops make guns a major item of business, but our Maui pawn shop does not have federal firearms license, and Hawaii’s state gun control laws are somewhat stricter than, say, Arizona’s.)

So, you are now asking, what about my high school class ring, that has been sitting in the back of my sock drawer since before I was married (and my youngest just graduated from college), does your pawn shop want it? And what for?

You bet we want it. Class rings are usually 10 karat gold. The colored stones are, typically, imitation and not worth a great deal, but we remove them and resell them in bulk to jewelers. The gold goes into a furnace and is melted down with other items we take in, making a small slab.

This slab, a mixture of 10-, 12-, 14-, 18- and 22-karat gold (and sometimes of other alloys), averages out to just under 60% pure gold. We send it off to a refiner on the Mainland, who combines it with slabs from other pawn shops and produces new bullion bars for the trade. Gold is the ultimate recyclable. It’s the one recyclable that everybody wants and that never goes to the landfill.

But now we see you thinking about something more valuable than a high school ring. You also remember that you have one-half of a pair of diamond earrings. The story of how the other one was lost is painful to remember. And you remember it every time you happen across it in your jewel case.

Wouldn’t it be better to get it out of your sight, especially if in return you get cash? We think so.

Our Maui pawn shop has a Graduate Gemologist on staff, and we are experienced in identifying, rating and purchasing and selling diamonds, loose or mounted.

Your lonely earring is probably set in gold (maybe platinum, rarely silver). The gold is worth something. The stone may be worth a lot or a little.

First, we test it to see if it is a real diamond or, heaven forbid!, cubic zirconium. An electronic tester combined with a powerful microscope is usually enough to resolve even doubtful cases.

Then the stone has to be evaluated for the Four C’s – cut, color, clarity and carat-weight. Two stones the same size can differ in value by 100-fold, depending on quality.

(A word of warning: With the price of gold as high as it has been for the past couple of years, a lot of fly-by-night buyers have opened storefronts or are making pitches over the Internet. Unlike Big Rich, they don’t really know much about gold and nothing at all about diamonds. So they won’t value your diamonds. Worse still, to get their hands on your gold, they will break the stones out. “Break” is too often the word, as brutal handling can crack a diamond. Never sell your jewelry to anyone who is not willing to give you a fair price on the whole thing.)

Diamonds are eminently recyclable, too, although the mechanism is not as simple as with gold.

Maybe that’s why our Maui pawn shop was named “Best Green Business” in the 2012 Maui Time Weekly Best of Maui Readers Poll.

We recycle surfboards, too, and ukuleles, TVs, computers, cellphones, video games, DVDs, trumpets, guitars (a big item for us), and an assortment of stuff too numerous to mention.

It’s always interesting to visit a pawn shop, even if you don’t need a loan, because you never know what has ended up on our shelves. Right now, we have a half-life size rocking horse, a 300-year-old Chinese jewelry box, a case full of Hawaiian stone tools, a wide range of paintings by Maui artists, dozens of tokens used when Hawaii was a Territory, fishing reels in an array of sizes from minnow to great white shark, golf clubs, diving gear and . . . well, you the idea.

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