Pawnshops don't have a great reputation.
In the industry's lousy reputation, Darren Mack finds a competitive advantage for his four-store chain, Palace Jewelry and Loan Co.
Inc.
Sitting in his office in the company's flagship store overlooking Virginia Street, across from the Eldorado Hotel & Casino, here's how Mack details his strategy: Because customers have low expectations when they walk into one of his four stores - one in Reno, three in the Las Vegas and Laughlin areas Mack works hard to make sure his employees wow them with service.
"The bad reputation makes it easy for us to deliver shockingly good service," he tells his staff.
"Deliver more than you promise and do it so the customer has a great experience doing it."
A fellow who comes into a Palace store for an engagement ring isn't really buying a ring, Mack explained.
Instead, the soonto- be wed fellow wants the experience of thrilling his fiancee.
It's the salesperson's job to help him deliver that experience.
Or the woman who comes into the shop to pawn a watch isn't looking for cash she's looking for the rent, supper for her kids or any number of other solutions to life's crises.
"You teach people how to talk with people," Mack said.
"If employees are only interested in sales, we don't want them here."
The emphasis on customer services reflects the changing face of the pawn business, where revenues and profits increasingly are on the retail side of the operation.
The lending side of the business works as it has since time immemorial: A customer who needs money puts up collateral of value a watch, jewelry, tools, whatever and gets a 120-day loan.
In Nevada, interest on the loan is pegged at 10 percent.
If the customer doesn't pay off or renew the loan at the end of 120 days, the shop sells the collateral.
"People who don't want to use banks use us," Mack said.
"It's a fast way to get money."
And not necessarily small amounts of money, either.
Palace Jewelry and Loan has made loans as great as $360,000.
The retail side of the business, however, accounts for about two-thirds of the revenues of Palace Jewelry and Loan, and Mack believes the company handles more large diamonds and used Rolex watches than any other outfit in northern Nevada.
The retail side of the business depends on cool appraisal of loan customers' collateral because a portion of the collateral will become retail inventory.
Increasingly, Mack said, customers who never have set foot in a pawn shop are coming in search of bargains and Palace Jewelry and Loan thinks it can hold those new customers.
"If we buy right and sell right, then we can't be beaten," said Mack.
"You buy from me once and you're mine forever."
"Forever" carries a deeper meaning for the 42-year-old Mack these days after he came within a small step from death a year ago.
After more than 15 years at the helm of Palace Jewelry and Loan he represents third-generation family ownership of the store Mack decided it was time to get into shape.
A steroid-free Mack came in fifth in his age group in a body-building competition in 2001.
A year later, while he was visiting Las Vegas, Mack was struck down by bacterial meningitis.
As he slipped into a coma, his family was told he probably would have brain damage and would face amputations if he lived at all.
"The doctors said it was like having a hand grenade go off in my body," Mack said.
After 10 days in a hospital and three weeks in a rehabilitation hospital in Florida, he was able to resume a full life.
"If I hadn't been in such great shape, my recovery and the effects of the disease would have been much more devastating," he said.
The business lesson he learned? "Time becomes more precious.
This is it.Today."
