How to Stop Running Your Pawnshop Like a Pawnshop

By Bravo

This piece was originally published in the Fall 2021 issue of Today's Pawnbroker. To see the original article, please visit

As humans, we find comfort in the routine, the predictable, the normalcy of repetition. But if we’d insisted on doing everything the same way, we’d still be in the Stone Age. The world is unpredictable and change is inevitable.

That’s the message that Steve Mack, fifth-generation pawnbroker and Yigal Adato, third-generation pawnbroker, want other pawnbrokers to walk away with from their experience running successful pawn businesses. If pawnshops want to survive in an ever faster changing environment, they will have to stop thinking like pawnshops.  

And the world is truly changing quickly, with existing consumer behavior trends accelerated by the economic stress of the pandemic. Coresight Research estimates that 10,000 stores will close in 2021, with only 4,000 new openings in the same period – for a difference of 6,000 fewer stores, up 10% from last year. On the flip side, Euromonitor predicts 17% of all goods in 2021 will be purchased online – double what it was in 2016.

We were fortunate to sit down with these two pawn titans to ask them how pawnshop owners can ride the wave of changes coming towards the industry. Yigal Adato is the CEO of Pawn Leaders, an industry expert, public speaker and renowned business coach with years of experience mentoring and building up businesses of his own. Steve Mack is the founder, Chairman and former CEO of Bravo Store Systems, and has decades of experience running an enterprise-level pawn business spanning almost 50 stores. Steve also served eight years as an Advisory Board member for Wells Fargo in Nevada.  

This conversation has been edited for length and clarity. To watch Steve and Yigal’s full conversation, please visit Bravo’s Facebook page at

Steve Mack, 5th generation pawnbroker and founder of Bravo Store Systems (left); Yigal Adato, 3rd generation pawnbroker and founder/CEO of Pawn Leaders (right)

Q: Through your work, we’ve observed both of you motivate, inspire, and really move people to action through challenging them. Fundamentally, you both see the need for change as an opportunity to grow, to improve and to be better. How would you describe the way that you enact change in the industry?

Steve: The way that I can be relevant to the next generation and to those that still want to be in the pawn business is through sharing my experiences and insights. Being in technology, we’re always looking into the future, so our mindset and core mission is to really figure out – how can we help the pawn industry? It’s by sharing and inspiring and being positive about a really challenging environment. So that’s where I see most of my efforts being pointed towards.

Yigal: For me, it’s being a third-generation pawn owner going to the other side of the table, and knowing the psychology of human habit – humans take so long to change their habits, yet the world is changing so quickly. Sometimes seeing things from the outside of the pawn world, I want to shake people up and say, ‘Wake up! It’s a new world, you’ve got to do things differently!’ At the core, we challenge people because we care. We’re multi-generational pawnbrokers, we care about the pawn community, and we care about the future of the industry. So, what good are we doing if we’re just sitting here saying, ‘Oh good job, keep doing what you’re doing’? Then we’re not being honest.  

Q: That segues into our next conversation, which is about why this talk was titled, “Don’t run your pawnshop like a pawnshop.” What does that mean? What mindset or posture are you asking people to take?

Yigal: I’ll start off with this. I’ve watched Shark Tank for a very long time, and every business that walked in there – doesn’t matter what industry, what kind of business – these multi-million, billionaire business owners would always ask the same questions, ‘What’s your customer acquisition cost?’ ‘What’s your margin?’ Pawnbrokers keep thinking that the pawn industry is different. We may have a different service, or different products, or different procedures and strategies but – at the core it’s a business. When I look at our industry’s giants, they're learning from different types of businesses and people. Different ideas, as opposed to just learning how to pawn, buy, sell and layaway. When you open your mind to that, then you can actually run your pawn shop like a business and not just like a pawn shop.

Steve: Pawn shops have come to represent people having hard times. What I recognized when I took over the family business was that we needed to change the storefront and look like retailers. Part of my strategy was to look at the best retailers and see what they were doing. Back in those days, it was location, location, location. Pawnbrokers will say, “Oh, well we can’t afford to have those kinds of locations.” Well, everyone would rather pay less for rent, but there’s a reason why those locations are good. Because it drives traffic! I’m still kind of shaking my head because when you Google ‘pawn’ and look at the images that come up, you’ll see that the pictures of pawn shops around the country all look the same. We’re not talking about technology – I'm just talking about the way a store should look. Pawn shops need to look like they’re a part of the financial community. We’re like Wells Fargo or Bank of America, because we’re one of the most heavily regulated businesses in the country.

Q: Let’s shift to talking about the pandemic. How does it impact the pawn industry specifically? What challenges are sitting out in front of pawnbrokers right now, and what areas of opportunity are pawnbrokers not seizing and taking advantage of?

Steve: During the pandemic, people were told they’re supposed to raise their family and work and not leave their front yard. And we were all of a sudden forced to use and adapt to technology, so we started off with the basics: online ordering, delivery. Everyone had to shift in their way of working, including pawn shops.  

There’s just a major, major shift that’s happening in consumer behavior. I don’t see customers coming back into stores. People are finding different ways of borrowing money. Consumers are buying merchandise online like they’ve never done before, so retail stores and big box stores are going to downsize. And pawnshops may have to do the same. There may be conversations about how to run a smaller pawn shop and do just as well.  

Yigal: I agree with Steve that I think the pandemic has caused people to use technology more. I spoke to a pawnbroker yesterday, and her question was, “Should I have my stuff online?” I said, “Where do you shop?” And she said, “Amazon.” So I responded, “Well, why would you think that your customer would be any different than you, as a person and as a buyer?” Why are we settling for mediocrity? Pawnbrokers are still wanting to hold on to their monthly recurring revenue, with the pawn balance, and just focusing on that.  

Like Steve said, everything is going online and pawnshops can become THE place to buy stuff – secondhand merchandise and even new merchandise – if we just market it correctly and if we stop thinking pre-pandemic. If we think post-pandemic – how do I get more customers, where does it go online, what can I do to market my business on social media – all these types of places will do incredible. One of my customers said to me yesterday, “My sales make up 70% of my bottom line now. If my pawn balance goes up and down, I’m happy, great. But I’m crushing it. Why? Because I’m doing Facebook Live, Instagram, Tick Tock, email marketing. I’m just becoming the place to shop.” And that’s what I think pawnbrokers are missing.  

Q: So you’ve already mentioned a few of these, but what are some of the things you would say are non-negotiable when it comes to pawnshops staying relevant?

Steve: There’s this conversation that goes back and forth in our industry – do we need to become really, really good pawnbrokers? Or do we become really, really good retailers? The answer is you have to be really great at both. There’s a bill coming down the pipe here and you're going to have to depend on 70% revenue and profit coming from retail because you’re going to get your interest rates cut. That’s coming. I mean, let’s take a look and see what’s happened to payday, where are they? They’re gone. There were paydays on every single corner and they’re gone. In order to be successful, it’s non-negotiable today to face the realities of what the headwinds are. There are ways to be really, really great pawnbrokers at lower interest rates. We have to figure it out. Because this business doesn’t have to go anywhere – it's collateral lending – and there will always be a segment of the population that will prefer to go borrow from a pawn shop rather than go to other venues.  

Yigal: No, it’s not time to take the pawnbroker hat off. But we’ve got to put two other hats on – one is leadership. I've said it before: People over pawns, teams over transactions. If you want to motivate and inspire your people to do incredible work, you have to be motivated and inspired yourself. I think a lot of the pawn industry is burned out. They're lacking motivation and they're just not inspired to do this anymore, and so, when they're trying to find and hire people, there’s a mismatch of expectations. The second thing is marketing. For many years, pawnbrokers could just open their store and make a lot of money. You could have been the biggest schmuck on the block and made money. And I’ve seen it nationwide, worldwide, but today it's different.

So for me it's those two things. It's leadership, you've got to learn leadership. You have to eat and breathe leadership and second, you have to become a marketing master.  You're not going to be where you want to be if you don’t learn to market your business.  

Q: That’s really interesting, because we surveyed pawnbrokers and Bravo customers about a year ago on what keeps them up at night, and we were surprised because – while building your legacy and growing your loan balance were two of the highest ranked items – the number one thing that pawnbrokers said was most problematic for them was attracting and retaining great employees who are highly motivated. You hear that all the time, right?

Yigal: I hear it all the time and I get frustrated with it and I’ll tell you why. Because it's easier than people think. First and foremost, look at what you currently have. I walk into pawn shops where the microwave is 25 years old and the lunch table is filled with PS4s and pawns. We're not taking care of our people who are doing our transactions, who need to come in with a smile on their face for nine hours a day, standing, testing, giving great customer service. And the second thing is, how do we expect to get great people to come if we're not out looking for them? In your calendar, you should have an hour a day to go out and hunt for great team members. What do baseball scouts do? They go out they sit at high school games. Pawnbrokers think that they're going to sit behind the counter and God’s going to send down from the heavens the most amazing employee who's going to be around forever, know everything, not want a raises every six months, and just come in with a smile. It's very frustrating to me because it's top down – if you don't change yourself as a leader, you can’t expect to get amazing people to come in.

Q: And what about you Steve? You had a lot of employees working for you when you owned Super Pawn, and you’ve seen Bravo grow over the years.

Steve: I mean, it was a block and tackle move for us at Super Pawn. It started with a really nice employee lounge. When our stores were designed, they had to have a place where employees could hang out and wind down. Then it was building transparency. Everyone knew everyone and what everyone else is making. And then we had weekly, bi-weekly, monthly compensation and threw really fun parties. We’d really get to know one another, get to know each other’s families and become a family. That’s what our company was about – the employees.

Q: It’s all about great customer service, right? But are all customers equally valuable?

Steve: I don't think pawnbrokers really understand the customer, that a customer that comes is a customer for life. Think of all the things that a customer does every single day – like how many things can we actually do to help them? That’s when we designed the idea of a full-service pawn shop, a place where customers could buy, trade, borrow money, a place to actually talk to somebody. We really believed that and we trained our employees to try to eliminate every administrative task possible so that they weren’t in the back room or behind the loan counter where they love to congregate. Push them out in the front to welcome customers into the store. Talk to customers, find out where they're from, how did they hear about us, why did they come in, what’s going on in their life? I mean, just making friends for life, and we attributed that to the examination of the lifetime value of the customer.

This contributed to our store in a number of different areas, but it really made a big difference when we were really focused on turning loan customers into sales customers. And now, your sales customers might need money, and – you know what? - they’ve purchased from you. You've got a historical inventory of all this stuff they’ve bought. Why aren’t we going back and saying, "Hey, you have that old pistol you bought and that’s where $700 or $1000 could be”? Just the idea of going back to customers, back to relationships.  

Yigal: It’s so crucial to know your customer. For example, we had this guy come in and buy DVDs every day. When we’re looking at average customer value, which is the average amount of money that a customer spends within your store every quarter or set period of time, we realized – he was spending thousands of dollars with us – thousands more than the customer pawning a $1000 ring or buying $500 necklaces. When we started realizing the difference between the average customer value and the customer acquisition cost, we realized how to bring the customer in. We worked on a 3%, 4% interest rate and we were just pushing sales, bringing people in.  

Steve: You know, we’re talking about prime customers coming in, where you’re finding value. Some customers default on merchandise that never come back. Pawnbrokers hate them because they didn’t make any interest on it and the item sat in their back room for 90 days. How about tracking profit from that item? How much profit dollars on that item that those people brought in that never come back? There’s a lifetime value on those customers too. Every customer and every activity creates that value. I think we need to look at it a different way and say, we need to find the good in the bad because it’s all good. Every customer that walks in the store, for any reason whatsoever, can add value to the store through the transactions that happen after. That's why we created consignment and trades. That's LIFE. It's really all about how to look at it, turning what we think is bad into good.

Yigal: I love this conversation because I think Steve and I think alike on this one. Our blood is boiling – we want people to wake up and change the mindset. We’re so used to just sitting with our arms crossed, waiting. If we shift our mindset, like Steve said, to see the good in the bad. Maybe this customer came in and they lost something seven months ago – but they put something on your shelf that you sold. You made money on it. Be thankful for the customer. Maybe you have to qualify them a little bit with a few extra questions, but it’s not their fault so don’t get angry at them. They came in. Think about how some of your customers have to ride the bus across town to come into your store to do a transaction. Just think about what they have to go through to come into your shop, where they create lifetime value for you. If you know your average customer value, you’ll realize that every person that walks through that door might be worth $300. And suddenly, customer service feels different.  

Q: We’ve talked a little about the employee experience, the customer experience, and changing mindsets on those things to become a better retailer. How do pawnbrokers need to be looking at technology differently?

Steve: If pawnbrokers are not doing ecommerce, what are they doing? Everyone is doing it and our customers expect it. If they can’t do it online, they’re going somewhere else.  

Pawn brokers have the greatest opportunity in the whole world – they have the stuff that everyone wants. People can get a good deal, they can negotiate, and it should be available online to the world.  

You have to put your brand on a single mobile app, with all the services you offer. I say this with authority, because when I sat on the Wells Fargo board in 2000, we were saying we have to be a branch where our customers can do everything. With the technology that we provided them, customers wouldn’t need to come into our branches anymore. We didn’t care. And look what’s happening – I mean, who doesn’t do online banking? Now even governments are moving into cryptocurrency – cash is going to be gone, and that is the threshold for pawnbrokers. Technology is evolving.

Yigal: I think the biggest thing preventing people from investing in technology is this excuse: “I’m too busy.” The point of technology is to make everything easier, more efficient, more effective. When you think about how you run your business, are you still doing Excel spreadsheets and trying to have the whole team use them, or are you using software like BaseCamp or ClickUp? Are you still doing marketing by hand or are you using Hubspot? Technology is all around us, and so when people say it costs too much money, the issue is that when you say it's a cost, you're always defensive. When you think about it as an investment, you’re down to put money in.

Where are your priorities? Because when you invest in the technology, you can have more freedom. You can't solve all of your business issues on your own – it's impossible. Pawnbrokers today are afraid to invest in technology because they still want the control of doing it all. If you want to use your technology to the best of its ability, you've got to invest right. You’ve got to invest in yourself and your business. If you're not willing to do it, please don't expect growth.  

Q: How often would you advise people to actually evaluate the software they use?  

Yigal: Weekly. I have regular meetings with my clients and the first question we ask is, what’s working and what’s not working? What happens to a pot of soup if you leave it alone on the fire? The liquid evaporates, it becomes thicker and harder to change, and if you leave it longer, it burns. So, as you sit and stew and you're not evaluating what's working, what's not working, where do I upgrade, what do I update, what do I change, what do I keep - you're just going to get burned out and you're not going to keep doing this and guess what? I see the younger generation look up and they say, I don't want to be like that - I want to go as far away from the pawn shop as possible, because all I see is my dad or my mom busting their tail seven days a week. So overwhelmed, so tired, not being able to show up to my events. Why would I ever want to build a business like that, why would I ever want to be a part of something like that?  

Steve: Yigal talked about pawnbrokers wanting to hold on, and they do things manually because they want to be in control. That’s an illusion – you actually have more control when you have good systems, a good platform. The first thing that 99.95% of pawnbrokers tell me when they come over to Bravo is, “Why didn’t I do this years ago? It’s so much easier than I thought.”  

Data conversions 20, 30 years ago used to take a year to clean the data and make it workable. Now, it’s a matter of days, and everything is fully automated so it’s easy to make the jump to go to good technology and be able to utilize it right away. At Bravo, we’ve invested in using the best technology. We use all Microsoft technologies and we use critical business infrastructure. Our dependability is the highest in the industry. But we’ve also made our platform affordable, matching cost feature-for-feature against other platforms. We just want you to get on the platform.  

Yigal: If you’re not consistently evaluating your surroundings, you’re not moving forward – you're moving backward. In leadership, you’ve got to sit down and evaluate with your team – make sure that you're asking, “What can we do to make things better easier, more efficient, so that you aren't overwhelmed?” Because, when your team's not overwhelmed, leadership isn't overwhelmed, and when leadership isn't overwhelmed, you can open up and be creative in the market, strategize and think about growth.

Q: To close everything out, what are three pieces of advice you’d give pawnbrokers who want to stop running their pawn shops like pawn shops?

Yigal: First and foremost, talk to your team and allow them to be transparent. Connect with them and leave them motivated and inspired to grow, be more efficient and be more effective to grow your business.

Second, know your customer. Don’t ask your friends to leave Google reviews for your business. Know what your customer is thinking. If you’re making moves and you’re not asking them, you’re making the wrong moves.

And third, be open to coaching. If you look at the Olympics right now, it’s all about coaching. They’ve got somebody who’s looking from the outside to say, that’s not right – wait a second let’s tweak this.  

Steve: The three things I’d tell pawnbrokers: The store has to have a great location. Your people have to be great. And you have to give them the tools. If you don’t have all three, you shouldn’t have a brick and mortar, because that thing’s costing you a fortune. Be different, keep challenging, keep thinking and lastly, you know, pat your employees on the back and tell them they’re doing a great job. Every single day.  

About Bravo Systems
Bravo Systems is the parent company to Bravo Platform, E4473, and Bravo Systems specializes in providing software solutions and services to underserved markets, including pawn, firearms and niche retail industries. Since the company’s inception more than a decade ago, Bravo has had a singular mission: to be the catalyst for advancement in the industries it serves.  

Bravo offers a robust suite of products and professional services including: point-of-sale software, digital 4473 software, mobile applications and eCommerce products, all of which are developed with thoughtfully engineered architecture, intuitive UI, sophisticated native integrations and first-to-market features that drive near-immediate return on investment for customers.