Struggling Families Turn to Pawnshops for Affordable Back-to-School Essentials Amid Tariff Fears and Rising Retail Prices

Amidst growing concerns over potential tariff increases, families are adopting an unconventional approach to back-to-school shopping – pawnshops. According to a survey by the National Retail Federation, households plan to spend around 2% less this academic year compared to last, with more Americans turning to these establishments for essential school items.

Les Gold, owner of American Jewelry and Loan in New York City, noted an increase in customers seeking back-to-school essentials such as shoes, laptops, musical instruments, and mini-fridges for dorm rooms. Pawnshops offer a one-stop solution for these items at significantly reduced prices compared to major retailers.

“In today’s economy, people realize they can save substantial amounts of money by visiting a pawnshop anywhere in the United States,” said Gold. “People are struggling more, and that’s why more people are looking for better deals.”

Tariffs have led to price hikes on certain back-to-school items, particularly clothing and shoes imported from China, Vietnam, and Cambodia – all countries subject to tariffs of up to 30%. According to the Consumer Price Index, shoe prices increased by 1.4% in July compared to June, while apparel costs rose marginally.

EZPawn, a national chain of pawnshops, reported a 4% increase in merchandise sales during the last quarter, with significant growth observed in categories like shoes, electronics, and laptops – popular back-to-school items. Renita Parker, a regional director overseeing 88 EZPawn stores in Houston, attributed this trend to affordable pricing and the financial struggles of customers.

“We’re getting more customers because they know we have reasonable prices and because they don’t really have to worry about the stress of paying retail when it’s unaffordable to them,” said Parker.

Pawnshops primarily deal in pre-owned merchandise, making them tariff-free. According to USA Pawn, 98% of items sold are second-hand. “Tariffs are not a factor here at our company simply because our customers are the ones that supply us with the merchandise,” said Parker.

Not only are families shopping at pawnshops, but they’re also pawning gold in large quantities. Nick Fulton, managing partner at USA Pawn with six locations in central Mississippi, observed a surge in gold sales over the past few weeks. Families are bringing in broken gold jewelry or single gold hoop earrings to sell for extra cash, especially as gold prices have skyrocketed since President Trump took office.

“It’s shocking when we tell people the price that we’re offering, they don’t realize how high the price of gold is,” said Fulton.

The increased business at pawnshops could be an economic indicator. As Gold put it, “You can’t imagine what’s going on in the economy right now unless you live in a pawn shop.” The average pawnshop customer often lacks access to traditional credit or loans and may carry debt, with credit card debt for all American households remaining steady at $1.2 trillion in Q2 this year.

“In reality, the economy isn’t as good for my clientele; they’re struggling,” said Gold. “We’re not talking about the people that are getting a paycheck once a week and they’re surviving. A lot of the people that we deal with don’t get a paycheck every week. They’re surviving day-to-day.”