More regulations coming for Edmonton pawn shops

More regulations coming for Edmonton pawn shops

A city committee wants to change the regulations that govern pawn shops and has asked city staff to develop amendments that include restrictions on how many can be located in a given area.

The discussion comes as the head of a company that owns eight pawn shops in Edmonton says her goal is to make the stores where people can trade items like musical instruments, jewelry and tools for quick cash "trendy and vibrant."

To that end, pawn shops should not be restricted from "clustering," Diana Machado, Chief Operating Officer with Cash Canada, told the city's urban planning committee on Wednesday.

"I don't want us to be stuck where we're going to be put into an industrial area," Machado said. "I want pawn shops to be able to become trendy and vibrant."

To achieve that, they need to be in the centre of a community — near grocery stores, restaurants and other amenities, she said.

She pointed to tattoo shops as an example of a type of business once considered "taboo," but said that image has been turned around.

Pawn shops can also become more "mainstream," she said.

Changes coming

The urban planning committee is considering three options put forward by city staff on how the bylaw governing pawn shops could be changed.

The changes would increase the regulations governing pawn shops.

Pawn shops would be required to notify local business associations when they want to locate in an area. There would be some requirements on the design, so the storefront is more attractive and windows aren't covered up, and there would be restrictions on how close one pawn shop can be to another to avoid "clustering."

Coun. Mike Nickel put forward a motion that city staff bring forward amendments to the by-law to include all three options. It was voted on and passed.

City staff will bring these suggested amendments back to the committee in April 2018.

City planners have been directed to consult with Business Improvement Areas and End Poverty Edmonton as part of its research into developing the changes.

"Pawn shops exist because we've left a gap in our system in terms of people's economic ability to survive," said Coun. Ben Henderson. "We need to be able to respond to that gap."

Henderson also said there could be better ways to serve people who need a short term loan than having them go to a pawn shop where they pay interest and service charges.

"The problem is if the more desperate you are, the more interest you have to pay. That doesn't help lift people out of poverty," Henderson said.

Bad image not warranted, pawn shop owner says

Cash Canada charges five per cent interest per month for an item, or 60 per cent a year, plus a 20 per cent storage and handling service fee, Machado said. "It is very expensive to run a pawn shop," she said.

Overhead costs include warehouses that are 7,000 square feet or larger, and an average of 10 employees per store, Machado added.

Although the industry is not regulated and fees and charges are not set, those rates are fairly standard, she added.

Cash Canada makes 44,000 transactions a month at its 18 stores across Alberta, with the average loan amounting to $113, Machado said. "We provide a service to a large sector in our economy," she added.

The negative image around pawn shops is not backed up by evidence, Machado said. 

"You cannot correlate crime in a neighbourhood to a pawn shop," she added.

Several years ago, pawn shops were required to register serial numbers and take photo identification from those leaving items behind. Since then, Machado said the hawking of stolen items has moved to sites online.

"We are serving moms and dads that all they need is $100 bucks until next payday to pay their bills, to feed their kids," she said.

"That's what we do."