'Pawn Star' Rick Harrison On His 'Deals And Steals'
Rick Harrison and his family run a 24-hour pawn shop in Las Vegas. Erik Kabik/erikkabik.com/History Channel hide caption
Rick Harrison and his family run a 24-hour pawn shop in Las Vegas.
Erik Kabik/erikkabik.com/History ChannelTwo years ago, a man walked into the Gold & Silver Pawn Shop in Las Vegas with a pair of diamond earrings.
Pawn dealer Rick Harrison asked him the typical questions — Where did you get it? Where is the receipt? — and the man readily answered. Harrison filled out the required paperwork and paid the man $40,000 for his merchandise.
The very next day, Harrison found out the earrings were stolen. The victim got her earrings back and the criminal was prosecuted. Harrison, meanwhile, was out $40,000.
"It's the cost of doing business," Harrison says. "That's the way I look at it. ... And Las Vegas is a crazy town at times. There's a lot of high-end things I get. So you have to know about ... really large diamonds, really expensive watches. ... So it's a lot different than most places."
Harrison, a second-generation pawn shop owner, is one of the stars of The History Channel's reality series Pawn Stars. The show follows Harrison, his father, Richard, his son Big Hoss and his son's friend Chumlee as they meet and haggle with customers who bring in all sorts of objects to sell and pawn. Harrison and his relatives assess the value of the objects — and try to determine whether or not they're fake — before offering their customers a collateral loan or money for their merchandise.
Harrison's new memoir, License to Pawn, details how he became an expert in, among other things, spotting fake Rolexes (he sees at least one a day), customer relations, human behavior, antiques and economics — all through running his 24-hour-a-day pawn business over the past 30 years.
License to Pawn: Deals, Steals, and My Life at the Gold & Silver
By Rick Harrison and Tim Keown
Hardcover, 272 pages
Hyperion
List Price: $23.99
How Pawn Shops Work
Pawn shops, Harrison says, have been around for thousands of years and are among the oldest forms of banking. The way it works is simple: Customers provide a personal item as collateral to receive a loan from a pawn broker, who can then sell the product if the customer doesn't pay back the loan plus interest in a set amount of time.
"Say you have a wedding band," Harrison says. "You bring the wedding band in[to] my store. I offer you $100 and you accept it. I give you the $100, plus a pawn ticket. You have 120 days to come back in my pawn shop and pick up your merchandise and pay me my money back."
"If you come back in 30 days, you give me $115. I hand you the ring back and everything's good in the world. Now, if you don't pay me back," he says, "I end up keeping the merchandise and I put it in my showcase for sale. Nothing goes on your credit report. No one chases you down to break any legs or anything like that. You just simply have lost your merchandise. It's that simple."
The average loan for a piece of personal property, Harrison says, is around $50. And most pawn shops also charge a service fee and then tack on interest — which can vary between 10 percent and 20 percent a month.
"So if you get a $50 loan, it's going to cost you $7.50 for the first month and $5 after that," he says. "It's a lot less money than if you go to one of these payday loan places, or if you bounce a check, for that matter."
But Harrison must be careful — balancing his loans with how much the merchandise is actually worth, and how much he can receive if the merchandise is then resold. He has become an expert at assessing the value of Gibson guitars, Rolex watches, diamonds — as well as regular household items like drills, cameras and home electronics. And making sure goods aren't stolen is always an issue.
"Most people don't realize how regulated the pawn industry is, especially where I'm at in Nevada," he says. "When I take something in pawn or I buy something, I just don't take [an] ID. I take their driver's license number, their height, their weight, their eye color, their build. I turn that into the local police department, and then I also turn it into Homeland Security. It's part of the Patriot Act, and that goes to a central database online across the United States that checks for stolen items."
Doing Business
The best nights for business, Harrison says, are fight nights, when hundreds of thousands of fans flood Las Vegas to bet on boxing.
"Someone has to lose," he says. "I don't know what it is about fight fans. They always bet more than they can afford to lose."
Sometimes after fights, he says, fans line up down the block around his store waiting to trade in their jewelry for cash.
And who buys the jewelry from Harrison? Pimps — and there's a good reason why. "When you get arrested for pandering, they take your cash — because the cash was obtained illegally — but they don't take away your jewelry," Harrison explains. "And a pimp knows that if he buys jewelry in a pawn shop, if [he] brings it back to a pawn shop and gets a loan against it, [they'll] always get half of what you paid for it — as opposed to buying it in a jewelry store, when [they] don't know what [they're] going to get. So, when they get arrested, they will always have someone bring their jewelry down to me. I will loan them half of what they paid for it — and that's their bail money."
But pimps aren't Harrison's only customers — he has a series of regulars, including gamblers, billionaires and men trying to impress their dates. But the people on his TV show, he says, are generally those trying to sell — not pawn — their goods.
"The people pawning goods never want to be on the show," he says. "And the reason behind that is because when people are pawning something, they're getting a loan and have to admit they're broke. ... When people are selling something, it's a financial transaction and it's just perceived differently."
And his advice for would-be negotiators? Stay friendly, never stay in love with anything, and never set the first price.
"You're negotiating against yourself," he says. "You don't want to offer someone $1,000 for something, if you ask them what they'd pay for it, and they might have said $500. ... And if it's in your head that you're going to buy this no matter what, you've already lost. There's no real negotiating going on. You've completely capitulated if you're going to get it no matter what."
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"I actually had a lady come into my pawn shop with a Faberge brooch. And she wanted $2,000 for it. And I just explained to her, 'You know what? I can't do it to you.' I ended up giving her $15,000. I just couldn't do it. I really do believe in six degrees of separation. If I did give her $2,000 for that, she would have eventually found out that I ripped her off, and she would have told everybody for the rest of her life, 'Don't go to that store. They will rip you off.' ... And I'm sure [good karma] works, because that woman will be worth her weight in advertising because she will tell everybody for the rest of her life what I did for her."
On the market for pawn shops
"I think it's 20 percent of the adult population in the United States that does not have a bank account. And most of them can't get one. They don't have credit cards. They don't have anything like that for when some small emergency pops up. A lot of people don't realize that up until the 1950s, pawn shops were the No. 1 form of customer credit in the United States."
On determining whether a Rolex is real or fake
"There's a list of things that are right on a Rolex watch that's not right on a fake. The case has to be right. The dial of the watch has to be right. The crystal, the stem, the movement. If everything checks out, everything's fine. ... Fifteen years ago, someone spent probably three- or four-thousand dollars to make a fake Rolex. And I got burned on that one, so it won't happen again. Someone bought a 1970s Rolex — a really beat-up one, for $700 or $800. They take the movement out. They got a new Rolex face for it. New Rolex hands. New crystal. Made an 18-karat gold case and band for it. And they were in the watch probably $3- to $4,000. I ended up buying it for $5,000. It's an entire industry, making fake things."
Excerpt: 'License To Pawn'
License to Pawn: Deals, Steals, and My Life at the Gold & Silver
By Rick Harrison and Tim Keown
Hardcover, 272 pages
Hyperion
List Price: $23.99
Chapter 1
THE STORM IN MY HEAD
I was eight years old, lying on my bed, when the world turned upside down. All of a sudden, no warning, without me moving, the floor became the ceiling and the ceiling became the floor. My head buzzed and crackled like a thousand power lines, and the world tilted on its axis. Slowly at first, then faster, until I was no longer aware of any of it.
I awoke later. I don't know how much later. I didn't know what had happened. My tongue felt like hamburger and my body felt as if it had been beaten with hammers. My legs were stiff and painful, my back hurt and my head held the residual buzz of whatever Category 5 electrical storm had struck it.
My parents' room was downstairs. My only thought was to get there; they would know how to handle this. My legs were cramped and constricted. I tasted blood from my shredded tongue. I was scared and confused and tired and just so goddamned scared. I got to my parents' room and knew from the looks on their faces that everything would be different from this point forward.
My first grand mal epileptic seizure, and the countless ones that followed, would define my childhood and much of my life. They struck violently and without warning. They struck mostly at night, and thankfully never at school. They struck with such severe force that I accepted it as a given that I would not live into adulthood.
Surely, at some point, one of these vengeful, raging attacks would cross the line. It would hit with all its wild, paralyzing fury, and I would simply never regain consciousness. From the time the seizures became a regular part of my life, I resigned myself to the idea that they would eventually kill me.
They altered my life in nearly every way. Whenever one hit, I would be out of school for as long as ten days. The muscle pulls were so painful and severe that I could do nothing but lay in bed with ice packs on my hamstrings and quadriceps.
It was there, in that bed in our suburban home in the Mission Valley section of San Diego, that my life changed again. I couldn't do anything. I couldn't move more than a few inches without pain. I didn't have a television in my room. Video games and iPads hadn't been invented. I was left to my own devices.
So I read books.
A lot of books.
I fell in love with a series of books called The Great Brain. These were the first books that captured my imagination. Written by John D. Fitzgerald, about a ten-year-old boy named Tom D. Fitzgerald, narrated by a younger brother known as J.D., The Great Brain allowed me to escape into a different world, a world I couldn't have. I would lose myself inside the pages.
The hero—owner of The Great Brain in question—lived in Utah and had these wonderful adventures that always centered on his ability to conjure a scheme that would make him money. He was a generous schemer, a con artist with a big heart. He'd do things like build a roller coaster in his backyard and charge to let people ride it, but there was always some twist at the end that caused him to have a crisis of conscience and give all the money back.
The Great Brain knew how to do everything: rescue friends who were trapped in a well; help a buddy deal with losing a leg; build that roller coaster. His world was my escape, my entree into a world outside the confines of my bedroom's four walls. I couldn't walk. I couldn't go to school. All I had were my ice packs and my books, so I made the best of it.
I have a very analytical, mathematical, calculating mind. I know I'm not supposed to believe in things like karma. But certain things have happened in my life that can't be explained by simple coincidence. How else can you explain the sequence of events and circumstances that led to me turning those bedridden hours—which should have been the worst hours of my life—into something that would provide a foundation for a life of curiosity and fun?
That's what happened. That's how profound the discovery of books was in my life. I didn't like school, but I loved books. Reading has been the basis of just about everything that came after. In that bed, I fell in love not only with books but with knowledge. The experience tapped into something I might never have found without the trying circumstances that led up to it. So much of the enjoyment I've gained from life has stemmed from a book—either researching some arcane item or reading to learn how to do something practical with my hands.
And how about the books I chose to read? Can it be explained away as mere coincidence that I chose a series of books about a kid my age who had an interest in making money and hustling to get it? I guess coincidence could explain it, and you're welcome to believe that. However, I have my doubts.
I was born in North Carolina, where my parents were raised. Their courtship was unlikely, to say the least. My mom comes from a very proper, accomplished Southern family. Her father was a county judge and eventually became one of the lead attorneys for Philip Morris in North Carolina. I have two cousins on my mom's side who work for Jet Propulsion Lab. My uncle was one of the lead designers on the space station and does satellite delivery systems. My cousins developed one of the first wireless Internet systems, which they sold for stock in an Internet company, unfortunately for them.
And my dad's side? Well, you might not be surprised to learn his family was a little less refined. They were dirt-poor white trash, left to survive on their wits for the most part. My dad was always a hustler, that's for sure. Old Man drove the school bus when he was fourteen. It apparently was legal to do that in North Carolina back in the 1950s. That was the law: You had to be at least fourteen years old to drive the school bus. Can you imagine an eighteen-year-old being allowed to do that now? Old Man got paid for it, of course—five or six dollars a week. He parked the bus at his house every night; he got up in the morning, picked up all the kids, and then parked the bus at the school during the school hours. When school got out, he would drop the kids off and park the bus at home.
But he wasn't always a pillar of responsibility. When he was seventeen, my dad stole a car, and he got caught. He appeared before the judge, and the judge said, "Son, do you want to go to jail or the military?" I assume my dad, pragmatic guy that he is, didn't waste a lot of time pondering this one. He chose the military.
My parents met at a barn dance when they were seventeen, before my dad left to join the navy. How's that for Americana? My mom was dragged to this dance by her friends—she had no interest in going—and when she saw my dad, she was attracted to him because he was really, really tan from working construction jobs. She thought he was Latin, if you can believe that. If she'd known he was a backwoods hick, she might have never spoken to him.
Excerpted from the book License to Pawn by Rick Harrison. Copyright 2011, Rick Harrison, LLC. Published by Hyperion. All Rights Reserved.