Ultrapawn.com debuts for online pawning
The popularity of cable TV shows "Pawn Stars," "Cajun Pawn Stars" and others, is changing the image of the pawning industry. And so is the Internet.
George Souri and his father, Michel Souri, this week launched Ultrapawn.com, an online retail pawning business that says it offers competitive loans and a system to insure valuables when they're shipped to them for appraisals.
"The pawn industry has historically had a stigma and these cable TV shows have presented things in a different light," George said. "They present historical or artistic information and that has brought pawning to the mainstream audience."
Although George lives in Chicago and his father is in Melrose Park, the website is registered in Littleton, Colo., because of how online pawning is regulated in Colorado compared to Illinois. The Illinois Department of Finance and Professional Regulations regulates all pawn store businesses statewide. However, Illinois does not have specific laws that regulate online pawning here, said department spokeswoman Susan Hofer.
But to get an Illinois license, any pawn store — online or bricks-and-mortar — must have its customers verify their identity. Copies are often taken of the customer's drivers license. It may be difficult to verify someone's identity while operating the business online, which is most likely the reason why there are no online pawning operations headquartered in Illinois, she said.
The men also separately own and operate bricks-and-mortar pawn stores in Lombard and Arlington Heights, and both stores are licensed in Illinois and regulated. The stores also receive items for appraisal from the online business customers, he said.
"We looked at the industry nationally and it occurred to us that there was a great opportunity to employ the online platform," said George Souri.
George also heads up Chicago-based private equity firm Atria Group, which is Ultrapawn.com's chief investor, and other investors are involved as well, he said.
This is how the website business works: To get an estimate of an item's value, customers fill out an online form describing the item. After receiving an estimate, customers use a prepaid shipping label provided by Ultrapawn.com to send the item in for appraisal.
Ultrapawn.com insures the customers' item for up to $1 million, George said.
Once the item is appraised, customers get a final offer and complete an online contract if they accept. Then the customer chooses how they want to get paid, either via wire to the customer's bank account or by prepaid debit card.
Customers then choose to repay the loan in 30, 60 or 90 days. Once the loan is repaid, Ultrapawn.com sends the item back to the customer. If the loan is not repaid, Ultrapawn.com keeps the item and sells it. There is no collection service and the customers' credit is not affected, George said.
Since pawn stores often carry negative connotations, Ultrapawn.com takes all the merchandise it receives each day and reports it to local authorities. If, for example, someone shipped an item from New York, then New York police would be notified about the item to check if it had been stolen. Same goes for a customer from unincorporated DuPage County, when the DuPage County Sheriff's Office would be notified if the customer was from that area, George said.
At the end of each day, George also runs the items through a privately run national database to see if they had been reported stolen, George said.
Merchandise is held for 30 days and, if it clears, it is then available to be returned to the original person or sold in the store, he said.
Ultrapawn has 15 employees and that workforce could expand as the business progresses, George said.
"We believe we've made this online form possible and can take pawning to the next level," George said. "This is not unlike what eBay did for the auction industry."
But when it comes to online businesses that do not pawn, there is no license required in Illinois, Hofer said. A business that allows consumers to shop on a website and requires that the item be shipped is simply considered "doing business by mail" Hofer said.
Still, consumers should use caution when dealing with any websites that assign a value to an item or heirloom and offer cash or a loan in exchange, she emphasized.
"If it's a substantial item, then you should get more than one estimate," she said.
For more information or to report fraud, call the IDFPR at (888) 473-4858.
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