Computer consultant Justin Luyt is shopping for a safe. Should his bank falter, out comes his savings and into the home vault it goes: $100,000 in cash.
“I find more comfort in the physical form of my money than the electronic form,” said Luyt, 35, who lives in Dallas.
Demand for home safes is surging amid a financial crisis that has sowed anxiety about banks. Sales at Bell Lock & Safe in Glendale, Arizona, jumped 15 per cent last month, while revenue rose to $40,000 from an average $25,000, said owner Rick Meehl. At the crossroads of Interstates 35 and 80 in Urbandale, Iowa, Strauss Safe & Lock Company drained its latest three-month supply of 15 safes in two weeks.
“People get nervous with what's going on,” said Jeff Reed, 44, manager of safe sales at Strauss Safe & Lock. “They don't really know what way to think.”
Atlanta-based Home Depot Inc, the world’s largest home-improvement retailer, has posted a “double-digit” increase in safe sales in recent weeks over the same period last year, according to spokeswoman Jean Niemi. She said figures weren't available.
“People are starting to wake up,” said Jake Foster, a retired Walnut Creek, California, mortgage broker who says he is safe-shopping. “They don't believe the lies coming out of Wall Street. There's a lot of fear out there.”
Fifteen US banks have failed this year, the most in 15 years. In addition, the Federal Deposit Insurance Corp counted 117 “problem” lenders in the second quarter, up 30 per cent from the first quarter. The FDIC earlier this month raised its deposit-insurance limit to $250,000 from $100,000 to discourage withdrawals.
Consumer safes cost from $19 to $4,000, retailers say. At Accu-Safes Inc. in Plainview, New York, some customers are seeking out the more-difficult-to-heist models, said William Leonardi, sales manager. The sale of 600- to 900-pounders costing $3,000 or more has more than doubled in the past month, he said.
In addition to cash, consumers are using safes to stow away coin collections, jewellry and precious metals.
“I had one gentleman with a lot of gold he wanted a little closer at a time like this,” Strauss Safe's Reed said.
Some, like freelance photographer Deborah Feingold, 57, opt to stockpile without the safe. After the Dow Jones Industrial Average dropped nearly 778 points on Sept. 29, she withdrew $4,000 from the bank and put it in the pocket of a raincoat hanging in a closet, “thinking nobody would look there”.
“The concern was, what did I need to live on if everything temporarily collapsed?” said Feingold, a resident of New York state who didn't want her town identified.
Some safe buyers are sheepish about their behaviour, said Larry Hilliard, operations director for the Avondale, Arizona-based Advance Safes LLC.
“They're embarrassed with what they're doing because they know it's something that's not ideal,” he said.
“They're even setting up strange delivery times because they don't want the neighbours to know they bought a safe,” said Hilliard, who schedules some truck runs before daybreak.
“We've seen all this before,” said Ed Baroody, president of Gardall Safe Corp in Syracuse, New York, who remembers sales spurts during the 1987 market crisis and as the new millennium approached in 1999.
Stashing cash in safes is precisely what the economy does not need, said Cary Leahey, senior managing director at Decision Economics Inc. in New York.
“You're reducing the circular flow of income,” he said. “If you give your dollar to your plumber, your plumber can use it to pay a bill from his electrician. The electrician then goes to the grocery store, and that one dollar has turned over many times.”
On the other hand, he said, using “The Simpsons” television show to illustrate his point, “If Homer and Marge decide not to go to the mall this weekend but put their money in a safe, you've got a problem. And it can be a very serious problem for the economy.”
