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Americans turn to pawn shops to make ends meet

Times are tough for millions of Americans, but this sluggish economy means business is booming for pawn shops - and the customers are not always who you think they are.

CBS News Correspondent Priya David Clemens recently visited one busy shop in San Francisco and met 24-year-old Jesse Hanlin, a political science student at UCLA, who needed money for college.

Hanlin lost part of his financial aid package and needed a way to cover expenses, so he headed to the pawn shop.

"I'm just a few thousand dollars short of the money they offered for financial aid," Hanlin said. "I'm trying to scramble it up everywhere I can get it."

Hanlin's story is a familiar one to Pacific Loan and Jewelry owner Michael Krasow, who has witnessed 40 years of economic ups and downs.

"When I started, we averaged 10, 20 loans a day," Krasow told Clemens. "Today we probably wrote 80, which is a slower day. We can write up to 150 loans a day."

There used to be a stigma in coming to a pawn shop. Not so much anymore. It's becoming a necessary reality for many cash-strapped Americans.

The pawn industry has been demystified and even glorified by recent hit reality TV shows like "Pawn Stars" and "Hard-Core Pawn". It may be one reason people seem more willing to avoid banks and credit cards - no questions asked.

Krasow said, "We're seeing a group of customers on the level that's not normal to what we've had. They've evidently made a lot of money at one point, had a lot of nice things and are turning them into cash."

Hanlin walked out with a $200 loan on this gold bracelet his mother gave him. "If I don't get it back, that would be just devastating."

But for now, the money, he says, will help meet his tuition deadline.

Up to 90 percent of customers come back to this shop for their items. But, Clemens said, at an interest rate of 35 to 40 percent, getting cash has its price.

On "The Early Show," Les Gold, star of truTV's "Hardcore Pawn" and owner of American Jewelry and Loan, talked about some of the quirks of his business in Detroit. Click on the video to hear about the strangest items he's ever seen in his shop and who is coming in to pawn their items.

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