What’s happened to the High Street and why do we need Money Shops?

I haven’t been into town for a while, well, you don’t need to go there if you aren’t going to buy anything. It’s a lovely day, so I took a detour via the cemetery and the park, to be treated to the lovely sight of a couple of jays flying over the railway line.

So I get into town and there it is, WHAM – what the heck has sprung up in the last year or so?

A Money Shop

What the hell is a money shop? What’s the current rate of £1 – well it ought to be £1, natch. But no, here we have an outfit that is going to sell you money, for money. Howzat work then? I took a butcher’s at The Money Shop website to find out how it all works.

At the Money Shop we believe that you should get your hands on cash when you need it. So why wait?

Why wait? Because you don’t have any frickin’ money and will have even less after getting out of The Money Shop! Just what is so hard to understand about that?

Not only can you give yourself the right royal shaft but you can get incentivised to stiff your similarly hard-up mates. So what is the current price on money? Well, say you need £100 and you’ve just been paid, but all your pay went on the last payday loan. Well, heck, so you write out a cheque to The Money shop for £100. The kicker is they only give you  £83.01 but the Money Shop will cash your £100 cheque after 30 days. That’s truly awesome.

Let’s assume you are the typical punter. you spend more than you earn, which is why you are coming to the Money Shop. Let’s say you want to buy Shanice some trinkets for Christmas and you need £100. Nobody else will advance this to you, so hello Money Shop. You need to borrow £100 from them, plus the amount they will charge you on top (£16.99)

Say this carries on for a year. You obviously have to borrow more and more since you need to borrow to cover the cost of the charges. How much are you borrowing at the end?

month borrowed charge
January £100 £16.99
February £117 £19.88
March £137 £23.25
April £160 £27.20
May £187 £31.83
June £219 £37.23
July £256 £43.56
August £300 £50.96
September £351 £59.62
October £411 £69.75
November £480 £81.60
December £562 £95.46

Yikes. Just. Say. No. Wilkins Micawber had it taped when he said that if you spend more than you earn the result is misery. The advantage of the Money Shop is it helps you get to the misery faster than the competition. I vote for Mr Money Mustache‘s approach:

when you come in and actually ask for a loan, I PUNCH YOU IN THE FACE AND TELL YOU TO WISE [...] UP AND GO SELL SOME OF YOUR SHIT INSTEAD OF BORROWING MORE MONEY!

Say what you like about MMM, but you can’t deny his dedication to excellence in customer service. Sometimes the customer is just so wrong, and needs to know the truth. Straight between the eyes…

Flabbergasted by this, I carried on, looking for places where fools could be parted from their money. The opportunities are legion –

Places you can get a paltry return on your Stuff

Cash Converters, a different sort of payday loan

Right next door, we have cash converters, where you can quickly turn your own or somebody else’s goods into cash. I’m actually a fan of CC for getting the odd item on the cheap, as there you get to handle the goods before buying. However, they don’t give you a lot and the markup’s been creeping up of late. Same sort of deal at Entertainment exchange, they seem to specialise on games and phones. Presumably this is how the consumer society pillages the yoof, who are brainwashed to value themselves by the type of phone they use?

Entertainment Exchange

Places where you can buy empty dreams and probably get nothing for your money

Place you can turn your spare cash into wasted time

So you to can shove coins into slots, whiling away the time you have left on this earth. There’s only really one question here, like WHY ON EARTH WOULD YOU WANT TO DO THAT? But enough people know the answer to be able to support a high-street shop to help them while away their little empty lives in quiet desperation.

So what makes better bet give you a better bet? Do they give you your money back if you don't win?

You get other flavours of this selling empty dreams to the proletariat. I just don’t get the attraction. Why not open a self-select ISA and bet on some companies instead? Though it does happen that you lose your entire stake (hello Ionica, hello Rage Software, I’m looking at you, kids) it really is very rare. And you know, often they give you a slice of dosh back twice a year. And you know what, they are such mugs that they carry on doing it for the long term. Even if you’re a rotten investor you generally come out with more than betterbet would give you. So how come betterbet get a place on the High Street and Stocks and Shares ISA doesn’t?

Two for the price of one - Ladbokes and slots

You get the ultimate in convenience up here, slots and Ladbrokes. All designed to fleece the stupid people. Ain’t capitalism a little bit dirty on the underside?

Places for fools to spend money on status symbols and get financial running sores

I don’t know, ‘cos I don’t have one personally, but what is really important for a load of people is to have the Right Mobile Phone, so they can switch off from the world around them and plug into the Hive-Mind, occasionally blundering into streetlamps, other people and dangerous things like roads that have cars on them without looking up. This is a really big need, well, looking at how much prime town centre real estate is dedicated to servicing this need:

3 phone store

right next door is

O2 phone store

and near that is

Orange phone store

and for a different take on the same theme we have

a horizontal slice of the market rather than vertical

before returning to vertical slicing with

T mobile phone store

and

Vodaphone store

returning again to horizontal slicing

Carphone Warehouse phone store

and a gonzo take on the genre with YACPS*

YACPS

* That’s Yet Another Crappy Phone Shop

Now your Ermine is an inquisitive creature, and something that is troubling his mind is just why does Ipswich, a town of 130,000 souls, need 8 phone shops. Have the good citizens of this benighted town never heard of the Internet, where presumably all the best deals are to be had? After all mobile phone contracts are just a few clicks of a mouse in some distant Indian back-office-outsourcing outfit, and if you actually need a phone handset or a SIM they are light and easily popped in the post.

Unlike other fashion items such as shoes and clothes, which are also well represented on the High Street, a mobile phone doesn’t need to fit snugly to any parts of the user’s body. I do admit to sometimes considering the option applied to the more obnoxious users, but the ermine is not built like a US marine so discretion is favoured over action most of the time. So what is up with all these phone shops!

The tragic conclusion I am coming to is that the High Street has got an awful lot of floor space that is purely dedicated to parting the feeble of mind from their hard-earned money, to the point where it is starting to look like a conspiracy! Happily this investigation into the weird and wonderful ways of Homo consumerus didn’t cost Mustela erminea any money, as it’s only 1½ miles to town, and I still know what my legs are for ;)

 

There are no less than 10 Money Shops within 3 miles of me, such is the smartness of the area I live in. They are a brand of the American DFG group whose motto is “Sharing the Caring Around the World”. I often wonder how stupid their customers really are. A credit union would be a better bet for most of them.

Phone shops are a bit of a mystery to me too, but I suppose the opportunity to sell a more expensice phone/plan justifies the rental. Maybe it’s a phase. I remember the old days when shops used to sell computers . . .

At first glance, this proliferation of mobile phone shops does seem surprising.

However a significant number of younger people do not have the credit rating, the desire or the long term financial planning skills to enter into a long term contract for their mobile device – so they purchase it outright from these shops, and use pay as you go SIMs.

In recent times, smartphones are becoming popular for internet use – even the PAYG the tarriffs are cheaper than many things and a lot of young folk are perfectly happy with a even more dumbed down version of facebook and texts and / or downloading/playing MP3s – in some cases rather bizzarely on the devices speakers, despite the fact that modern urban and electronic music is produced for loud bass and sounds rubbish played in such a manner – todays generations have not realised why ghetto blasters were made the size they were…

Add to this the large population of transient workers from overseas who use mobile phones and this creates the market for these shops.

The last shop in your pic would is more likely to sell second hand mobiles and SIM cards from a variety of “grey” sources.

A further subset of people in town would own more than one mobile device with different numbers, for a variety of reasons. Often a cheaper or even disposable mobile is used for certain purposes, many crossing the bounds of conventional ethical behaviour / legality ;). This sort of thing is more common than many folk realise…

That said, I do get the impression sometimes that some parts the Town Centre is stuck in the 1990s/2000s as if the “good times of free spending are still there”, and I don’t think that is going to last very long!

[...] Amusing Update: After I wrote this article, it was apparently translated into British and appeared on a blog called “Simple Living in Suffolk”. I found out when the author linked to this article from his own! You can read the results here. [...]

I must confess: I own a cell phone. I use it every now and then. It doesn’t have a camera. I cannot read it sideways when surfing the net. In fact, I use this mobile phone as an occasional communication device. I like to use it to make phone calls or send a messages on occasion. It is useful. However, I still can’t understand why people line-up to be the first to buy an i-phone. I recently bought a back up Nokia (made in India). It cost about $27.00. So, when my old Nokia dies eventually, I’ll have another one to take with me to the bone-yard.I like your article. The pictures really show how smoke and mirrors the western economies have become.

Perhaps another reason the mobile phone shops may still be thriving is that in our town a lot of younger people also cannot or do not want a fixed line contract for broadband services, as you have to sign up for a year or have good credit rating.

so those with laptops or PCs often also buy a USB device which allows them to to get online via a 3G mobile network – in addition to their other mobile phones!

With the short term PAYG contracts as opposed to a constant line rental cost there is comparatively little financial penalty for having more than one device…

This is perhaps borne out by a complaint from the UK Communications Ministry (Ofcom) that the speeds are slowing (due to overloading of the network, and a lack of investment as the mobile companies are dropping the service prices to gain new customers).

http://www.pcr-online.biz/news/36382/Ofcom-Mobile-broadband-speeds-decreasing?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+pcretailmag%2FhZYN+%28PC+Retail+News+with+Pcr-online.biz%29

as for the bookies and casino, they are sometimes fed with others peoples money!

http://www.eveningstar.co.uk/news/ipswich_dope_smoking_burglar_back_in_jail_for_south_close_and_cardigan_street_break_ins_1_904436

Those photos could easily be of Leicester, too, probably of any fair sized market town in England. Maybe we have more pawnbrokers, but we are definitely drowning in ‘phone shops..

If there are so many people willing to borrow at those rates, I could almost be tempted into the market… but it would feel a bit like hanging round the kindergarten and stealing sweeties. The customers of each seem equally mature, so though there’s a good fleecing to be made, I doubt I could sleep at night, or would soon pull the Mustache Manoeuvre :-) (and thanks for the intro to another entertaining blog, by the way).

When it comes to the ‘phones, though, I too fail to grasp the overwhelming importance of the latest models. Mine is an old brick (Nokia 3310) and due to a bit of damage had to replace it recently. Got another just like it for less than a tenner on eBay (inc. P&P…) Makes calls, does text, what else do I need? But I guess I am ‘on trend’ in another way – no landline, and use a 3G dongle for broadband access.

And as for book-keepers – never been inside one. Gambling is a vice I just cannot grasp at all. I have a few friends who take the odd flutter. They all remember the one winner they had, but discount the regular £20 lost every weekend. Same with lottery tickets and scratch cards. They recall the time they won a tenner, but discount all the times they bought 5 cards a week.

My vestigial gambling urges are more than satisfied by an S&S ISA to test my judgment of the odds, and some Premium Bonds to experience the thrill of pure randomness without sacrificing my stake. I know PBs can be eroded by inflation, but I’m actually keeping ahead of that so far, and every month brings the outside chance of becoming an instant millionaire without further input from me (ok, there is the time spent checking the NS&I website each month ;-) ) Who needs to call the Old Firm results or have an each-way on Shergar coming back to life?

Hi ermine

You seem to be one of the lucky ones with only one “The Money Shop” in your High Street. I must be in a slightly poorer area as I have at least 3 of these types of outfits, including The Money Shop, in my local High Street.

I also have plenty of choice when it comes to mobile phone, betting and slot machine outfits also so hear you on that one.

Cheers
RIT

Oh dear, I really did say ‘book-keepers’… I meant book-makers, obviously :-(

@SG, RIT you guys are in the money – on further investigation there are two Money Shops in Ipswich so the rot is spreading fast. As for the phone shops, I only took pictures of the ones on the sunny side of the street so there are more to be had.

@Macs, I was wondering what you had against the accountancy profession, they may not be the life and soul of the party but it’s a dirty job and somebody has to do it ;) Unlike the bookies, there must be a scary amount of money tossed in their direction. Give me the odds on the stock market any day! it’s the age old tallying the successes and brushing losses under the carpet routine.

I may consider going the dongle route when I leave work, what I need is a way to interface it to my home LAN and share it.

@Alex either your yoof is a lot more savvy than me or I am as tight as a ducks a*** because I got a dongle for when I went on holiday and the cost was stupendous. I ake the point it is good to ice the landline a la Macs but as soon as you have more than one computer that starts to get tired as you have to use or lose the monthly Mb purchased. Fair enough for the Polish community, I bought a SIM when I was in Germany to get round being ripped senseless on call charges. It’s still a hell of a retail footprint, though, do we do anything other than yakking on our mobiles while playing slots. I can understand why other countries are eating us for breakfast in the economy if this is what we do all day!

@Macs

The customers of each seem equally mature, so though there’s a good fleecing to be made, I doubt I could sleep at night, or would soon pull the Mustache Manoeuvre

Go with the ‘tache. Direct and to the point, and it sorts the problem. What’s not to like?

[...] What is happening to the High Street? – Simple Living in Suffolk [...]

I’ve also seen a few short term loans advertised on TV recently with APRs of over 2000% – that’s right: there’s no decimal point in there!

I don’t know why I bother with Zopa; I should apply for a Consumer Credit Act Licence and set up my own Money Shop. Alternatively, I could steal sweets from children.

Since I don’t own a mobile phone, I’m singularly tuned out of how many storefronts there are for them. I see lots of advertising for the services, but can cheerfully ignore them all.

I wouldn’t say you are tight – but prudent, forward planning and community-minded – and so can afford the relatively minor cost of a landline based connection.

Young users of mobile devices might pay a slight price premium over landline but thats because they don’t want to bother with the contract paperwork or live in areas with bad credit ratings.

Previously, NTL (Virgin Media) used to pick up the lower value high risk customer segment (students and youths living in shared accomodation) but were plagued by a load of bad customer debt so unless the building is cabled already (many shared houses are since the 1990s) often turn down the business unless the prospective customers can provided as sound a credit rating as those required for BT or other landline companies.

It is possible to buy a 3G router into which the dongle is inserted, allowing you to share the connection between multiple devices. One caveat though is the mobile connections use multiple layers of NAT and thus do not always present a full IP address to the wider Internet – so if you wanted to use this for running servers you will encounter issues.

Personally if you live in a house I think the landline solution is potentially more robust and resilient, especially as the mobile companies are stalling on investment/network upgrades.

5 Jun 2011, 2:30pm
by Monte Christo


Nice post. A trip to town is not a pleasant experience these days.

Obviously we don’t need these outlets but people obviously want their services otherwise they would cease to make a profit. It’s called capitalism the same capitalism that allows you the freedom to speculate (gamble/bet) on stocks to fund your intended lifestyle.

Our culture of status envy fuels the increasingly exploitative have it now brigade.

Its all very depressing. However, don’t be too harsh on the stupid people as we need a good supply of them to consume services in order to make money for share holders.

We are all guilty of creating the current nightmare.

Salis Grano said it best – go go credit unions!

I’m a member of Glasgow Credit Union (www.glasgowcu.com) and universal skintness is so, erm… universal, that they actually advertise ‘revolving credit’ as a service.

Still, suspect that their rates are in the low double digits as they’re not the Money Shop.

Also, *two* money shops? The horror! The picturesquely named ‘Heilanman’s Umbrella’ in Glasgow has 3-4 of these lenders in one depressing stretch that can’t exceed 50′ in length.

Then again, we’re a fairly big city and can boast at least two mobile phone shops on every pedestrianised street and *at least* two £1 shops per inhabitant.

The only way to get away from this is to visit one of the leafier suburbs and put up with £3 coffees and hoards of English immigrants who no doubt sold their homes in Ipswich to escape from the payday loan shops :-D

Excuse the sarcasm, I too mourn the death of the city centre.

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[...] of personal finance it seems to concentrate the evil. Now I personally think if you take out a payday loan you’d pretty much got it coming to you, and while I’m not a dedicated follower of Ayn Rand I do think personal responsibility and [...]

[...] Converters. It isn’t just the gold ads, it’s the fact they’re right next to a Money Shop. You’d have thought the Ermine is right up their street, no job, no income, what’s not [...]

[...] 1 in the shattered remnants of what used to be the High Street before all the shops turned into payday lenders and charity [...]

[...] enough that I can get the money out of him with my heavies as opposed to the heavies used by the other guys he’s likely to borrow money from. However, though Zopa try and make out all cuddly with their Valentine story and all smoochy [...]

[…] you are a customer of a pay-day loan provider, you are most definitely Frankie and the casino is the […]

[…] and pay off the loan 3. For a short period I even considered Wonga or The Money Shop, despite taking the piss something rotten a while ago. A two-week period over the 6th April would actually be the correct use of a payday […]

 

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