Pawnbrokers' auctions, which have been going on for over half a century, are going, going, almost gone.
The last two public auctions of unredeemed pawned valuables will be held on Saturday and on Oct 24 at 12.45pm in Hotel Royal @ Queens.
The Registry of Pawnbrokers said it is scrapping the auctions as only a small proportion of pawnshop customers benefit from this system.
Holding the auctions also adds to business costs, which are passed onto clients.
Under the auction system, if a client does not redeem his valuables or renew the loan within six months, they are sent for auction.
Is part of nearly $5m unclaimed surplus yours?
There is close to $5 million waiting to be claimed by pawnshop clients whose valuables were auctioned off. The sum comes from the sales of about 63,000 pledges. A pledge is one or more valuables pawned in a single transaction.
How this nearly $5 million sum came about is this: If a pawnshop client does not redeem his item or renew the loan within six months of pawning the valuable, it is sent for auction.
If the item is auctioned for more than the outstanding debt to the pawnbroker plus the auction expenses, the surplus sum is returned to the client.
If the customer does not claim this surplus from the pawnshop within four months of the auction, the pawnbroker must transfer the sum to the Accountant-General's Department. As of end of May, the department held about $4.87 million in unclaimed surpluses.
To check if you have an unclaimed surplus, visit the Registry of Pawnbrokers website at www.mlaw.gov.sg.
If an item is sold for more than the outstanding debt to the pawnbroker plus the auction expenses, the surplus sum is returned to the client.
An average of 6 per cent of the 18,000 pledges put up for auction each month were bought last year. A pledge is one or more valuables pawned in a transaction.
Since most of the pledges were not sold, very few clients received any surplus.
A spokesman for the Registry of Pawnbrokers said: "The removal of the auction system should benefit pawnshop clients, as pawnbrokers are likely to pass on the ensuing cost savings to them. For example, by giving lower interest rates or higher valuations for the items pawned."
Pawnbrokers are free to dispose of unredeemed items in any way after the auctions are stopped.
Pawnshops welcome the move, saying this would reduce their business costs and also save them a lot of administrative work. They plan to sell the unredeemed valuables as second-hand jewellery in their shops or melt the gold to sell.
ValueMax has 23 pawnshops. Its executive director Yeah Lee Ching said the chain can give its clients a better valuation for their goods with the cost savings from doing away with the auctions.
The auctions, usually held twice a month, are open to the public. However, pawnbrokers point out that most of those who show up are second-hand dealers out to snap up bargains. Their aggressive bidding tactics often scare off members of the public.
The number of pawnshops has doubled since 2008, after pawnbroking chains MoneyMax and Maxi Cash entered the business.
There are 228 pawnshops now - double the 114 in 2008.
Jewellery firm Soo Kee Group started MoneyMax in 2008, while its competitor Aspial Corporation set up Maxi Cash in 2009.
MoneyMax now has 37 stores, while Maxi Cash has expanded to 40 shops.
The three big players, Maxi Cash, MoneyMax and ValueMax, run almost half of all the pawnshops here, said Mr Ivan Ho, president of the Singapore Pawnbrokers' Association.
With so many pawnshops around, Maxi Cash spokesman Magdalene Eng said: "Every shop is giving as high a valuation as we can to keep each client.
"If you don't give a good valuation, clients would just go next door to the next pawnshop."
Mr Ho said the loans given out have also shot up from $2 billion in 2009 to $5.4 billion last year, but last year's figure was still lower than the $7.1 billion in 2012 when gold price was at its peak.
Most of the valuables pawned are gold jewellery, so the sums loaned would go up when the gold price rises.
Housewife Suraiyah Mohamed Ghaus, 43, pawns her jewellery whenever she needs cash to pay the bills. The widow has five children.
She has at least one gold ring that was sent for auction and she received about $10 in surplus from the sale. She said: "The surplus I have received is so small. I hope that pawnshops can give us better rates instead when there are no more auctions."