Alex Shamis/Daily Journal John Gjersoe, assistant manager of Pick of the Litter in Burlingame, made sure the racks were organized.

Some shop owners are celebrating a sluggish economy as people looking for extra cash and bargains are paying more attention to pawn shops and second-hand stores.

“What I’ve noticed is people redeeming more in the last couple of months,” said Rick Gerodias, manager of Cash Loan Inc. pawn shop in South San Francisco.

Many resale, pawn and consignment shops are reporting increased sales despite the mortgage crisis, rising gas prices and the threat of recession. With little cash in their pockets, consumers are shopping for deals at second-hand stores such as the Peninsula Humane Society’s Pick of the Litter and trying to pay bills with cash from pawn shops.

“I notice they need a little extra cash every month to pay for gas, for bills,” Gerodias said.

Pawn shops offer cash loans to customers based on the value of an item they bring to the store. Customers have up to four months to repay the loan with interest — at rates set by the state — and retrieve their item. Approximately 85 to 90 percent of customers make those payments and become repeat customers, Gerodias said.

Many people are also digging up broken gold jewelry and trading it in for cash. Pawn shops melt down the scraps and sell the gold, which historically rises in value as the dollar weakens and stocks slip into the red.

On Wednesday, gold dipped below $900 an ounce for the first time in a month. However, it rose between $300 and $400 in the last few months and is expected to rise as the U.S. dollar weakens, according to analysts.

That means people are digging through dresser drawers for broken gold jewelry and selling it at places like Millbrae’s Numis International. The shop’s return customers are people who simply “need help paying the bills,” said owner Allen Notowitz.

However, casual shoppers looking for a $100 piece of jewelry are dwindling, Notowitz said.

As people tighten their purse strings amid the mortgage crisis, rising gas prices and dwindling dollar, many mid-size retailers are feeling the squeeze. Secondhand stores, however, are seeing a bit of a boom.

Pick of the Litter, the Peninsula Humane Society’s thrift shop in Burlingame, saw revenue rise 13 percent from last year. As of June 30, revenue was $290,000, up from last year’s $273,000, according to the PHS.

The store features gently used clothing, furniture, household items, art and jewelry. Sales from donated items benefit the PHS shelter. The store is open seven days a week and has the equivalent of three paid staff, according to the PHS.

“When times are tight and people look for belt-tightening measures, they may be more likely to shop for clothing and other items at second-hand stores,” store Assistant Manager John Gjersoe said in a press release issued by the PHS.

The increased business at second-hand stores and pawn shops prove people still have money to spend.

They just think twice about how they spend it, Notowitz said.

“The economy is off, but our type of business is almost recession proof,” said Notowitz.

Dana Yates can be reached by e-mail: dana@smdailyjournal.com or by phone: (650) 344-5200 ext. 106.