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Thursday, December 02, 2021

Buy now, pay later is the new layaway: What are the pros and cons?

FOX BUSINESS - When Walmart announced it was ending its layaway program for the majority of its store categories in favor of a buy now, pay later format, social media users expressed their confusion and sadness with nostalgic tweets. 

Retail experts and financial lending providers aren’t surprised by the shift. In fact, some are even saying that buy now, pay later is the new layaway.

7 comments:

  1. One would think this is ….Great.
    I Do Not.

    First order effect-gimme now(very mercan(very child))
    2nd order effect- what does it teach? (Nothin cept GIMME(again how juvenile)) How bout teachin some Economics?‽!!
    3rd order effect-default
    4th order effect-Dealin with REPO.

    What stupidity and Desperation by these Corps that “say” they care about “there customers”.
    Especially since this Social Justice BS has become Corp. America’s new GOD.

    And what will we end up with…????
    HIGHER Priced crap because of defaults and folks not being able to afford it.

    Hell i want a G5, the fuel and a damn pilot.
    Gimme!!!!, i’ll pay later in Installments.

    ReplyDelete
    Replies
    1. By now, pay later has been going on in American business for as long as I remember. No different than a credit card. There will be no repo because Walmart doesn't want their junk back. Worst that will happen is you get your credit report dinged. The debt will get sold and you will get some phone calls wanting you to promise to pay. After a while, when there is enough claims in one area they will file suit in court. Court will order you to pay but you would have been paying if you could.
      Daryl

      Delete
    2. I hear in parts of Cali, you can "buy now, pay never" at all major retailors.
      -Just A Chemist

      Delete
  2. Back in the day layaway was what allowed all the crap for Christmas to be bought, it was a place to keep it until needed and there were no credit card bills after...

    ReplyDelete
    Replies
    1. Yep, then everyone got a credit card and instant gratification became the norm
      JD

      Delete
  3. Remember the house bust? Well this is just like that, but with "stuff" instead of houses.

    ReplyDelete
  4. Store credit is nothing new. Go back to the 19th Century, and most farmers relied on credit from the small-town general stores. BUT those stores knew their customers. They did not give credit to itinerants. They knew where a customer lived, when he planted a crop, how well the crops were growing, and they definitely knew when a farmer sold his crop and had money to pay his debt. Anyone who was often in the saloon when he should have been working in in the fields, or who didn't pay when he got paid would be cut off - and the town gossips would soon know about it, so someone who stiffed the store would not only need to pay cash up front for everything, but wouldn't be trusted by their neighbors in other deals.

    Big stores like Walmart are different, and that goes way back to when Macy's was new. They have many more customers than their managers can know. So Macy's might issue a credit card after an investigation showed a customer appeared reliable and wealthy enough to legitimately shop there. Other stores followed with their own credit cards. E.g., some 40 years ago when I was an E2 or E3 in the Air Force, I got a credit card from Sears for emergencies. I can only remember using it once; when a set of tires unexpectedly started shedding the tread on a very hot day in New Mexico, I bought replacements from Sears, and paid over several paychecks. That was a godsend...

    Big box stores didn't have a large enough margin to afford discovering that a customer looked solid but actually was a deadbeat, so they did not issue store credit cards. Instead, there was layaway, where the merchandise stayed in the store until paid for. If a customer abandoned their layaway, the store still might have the problem of trying to re-sell merchandise that was past its season, but on paper they were showing a profit from taking a deposit and still having the goods, and it probably evened out in the end. But layaway was labor-intensive for the store, and Walmart ended it when they figured enough customers had credit cards and could pay now.

    And now they're back to trying to find a way to let customers run a tab without getting burned. I assume they're losing business from customers who can't get a credit card, so this is going to take careful investigations to distinguish the poor but honest who will catch up the bills when they can from the chronic deadbeats.

    markm

    ReplyDelete

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