“Your average order will increase:” Considerations for Buy Now, Pay Later plans for holiday shopping
OCEAN CITY, Md.- Four, interest-free installments that allow you the convenience to pay on your terms. We’re talking about the growing trend of Buy Now, Pay Later plans.
According to Debt Hammer, more than 44% of Americans have signed up for at least one Buy Now, Pay Later plan.
Local shops like Bomshell Boutique now offer the service on their website, online app, and in-store as we head into the thick of the holiday shopping season. “We implemented I would say probably before COVID. It had just started and I thought it would be a great feature,” Owner Gina March
“Maybe it’s that they can’t afford everything at once, especially now with trying to buy gifts and stuff. If they’re able to purchase it in four different installments instead of all at once at no cost to them, why would you not do it?”
March says offering such a service does come with things like convenience fees the business will have to pay, but the pros outweigh the cons. “You’ll see that your average order will increase,” March says.
According to March, the service is highly used by online shoppers and loyalty/rewards program customers.
With that much power in a shopper’s hands, financial professionals say how you handle that power will determine your financial standing even after the holidays. “When we take a look at Buy Now, Pay Later it’s generally because our budget has been decimated and we’re trying to scramble as to what we’re going to do,” Spedden said.
“If we don’t have room on credit cards we currently have, we start to open up other accounts, right? Then we wind up having four or five different ones at the end of the holiday season. Then the bills start coming in and you say, ‘wow I didn’t budget for this.'”
The average shopper plans to spend a little over $1, 400 this holiday season, according to PWC.
It’s easy to overspend, which is why Financial Planner Matthew Spedden with Heritage Financial Consultants tells us you should make a list and check it twice. “What’s the most stressful thing in our life? Normally it’s a budget. So, if we’re only increasing what we owe at a higher interest rate it kind of turns it into that vicious cycle of not getting ahead if you will,” Spedden said.
Matthew Spedden is a registered representative of Lincoln Financial Advisors Corp. Securities and investment advisory services are offered through Lincoln Financial Advisors, a broker-dealer (member SIPC) and registered investment advisor. Heritage Financial Consultants is not an affiliate of Lincoln Financial Advisors Corp. CRN-5357628-121922
March says things like inflation have resulted in less foot traffic coming into the store but shared the importance of keeping your dollar local. “We’re seeing them less frequent can definitely see our customers are staying true to wanting to shop small business,” March said.
Spedden suggests you can avoid being in a tight crunch for your holiday gifting by budgeting to save around 10% of your monthly income throughout the year.
Bombshell Boutique also offers a rewards program for those looking to save.
