A recent survey by the National Retail Federation shows American households plan to spend 2% less on back-to-school supplies this year compared to last. CNN reports that many pawn shops are seeing an increase in customers looking for essential back-to-school items.

"In this economy, people are realizing they can go to any pawn shop in America and save a lot of money," said Les Gold, owner of American Jewelry & Loan in Detroit.

Shoppers can find everything from sneakers and laptops to musical instruments and mini-fridges for dorm rooms, often at a fraction of the cost of major retailers. "People are struggling more than before, so they need to find deals. They don't have the money, but they still want their kids to have laptops," Gold explained.

A pawn shop in Los Angeles (USA). Photo: Reuters

A pawn shop in Los Angeles (USA). Photo: Reuters

Import tariffs have increased the price of some essential back-to-school items. The US imports clothing and footwear primarily from China, Vietnam, and Cambodia, and tariffs on these goods range from 19% to 30%. July's Consumer Price Index (CPI) showed a 1.4% increase in footwear prices and a 0.1% increase in clothing prices.

However, prices at pawn shops can be up to 50% lower than at major retailers, according to EZPawn, a chain with 500 stores across the US. Their sales increased 4% last quarter, with shoes, boots, electronics, and laptops being the most popular items.

"More and more customers are coming to us because of our affordable prices. They don't have to stress about money anymore," said Renita Parker, a regional manager for EZPawn in Houston.

Furthermore, USA Pawn, a pawn shop chain, notes that 98% of their merchandise is pre-owned, meaning it's not subject to import tariffs. "Import tariffs aren't a problem here because our customers supply the products," Parker explained.

Americans aren't just buying at pawn shops; they're also pawning their gold. "This trend has skyrocketed in the past three weeks. It seems customers are selling gold and jewelry to buy back-to-school necessities," said Nick Fulton, a manager at USA Pawn, which has six locations in central Mississippi.

Families in need of cash are bringing in broken gold jewelry or even a single gold earring. "These items used to sit in their drawers. Now they're bringing them here, with gold prices being so high," Fulton said.

Since Donald Trump's presidency, gold prices have repeatedly hit record highs due to increased demand for safe-haven assets. Gold prices have risen 27% since the beginning of the year, trading around 3,400 USD per ounce. "When we give them a purchase price, they're shocked because they don't realize how high gold prices are now," Fulton added.

However, the booming pawn shop business could be a warning sign for the economy. The busier these shops are, the worse the situation seems to be for many people.

"Pawn shops help people survive by lending them money when they pawn their assets or by selling them goods cheaper than elsewhere. You can't really understand the economic situation unless you live in a pawn shop," Gold observed.

The National Pawnbrokers Association notes that pawn shop customers are typically those who lack access to traditional lending channels and may even be in debt. Total US household credit card debt in Quarter II was 1,200 billion USD, similar to the same period last year, according to data from the Federal Reserve Bank of New York (Fed).

"My customers are struggling in this economy. We're not talking about people who get a weekly paycheck and are getting by. A lot of the people we see don't have a weekly paycheck and are just trying to survive day to day," Gold said.

Ha Thu (according to CNN, Reuters)