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2 min read. October 6, 2021 – by Amanda D’Auria
With supply chain problems growing more frequent, many retailers are encouraging shoppers to start their holiday shopping early this year. In the past, some of those customers would’ve put items on layaway and paid for these purchases over time.
But this year, retailers are either scaling back or getting rid of layaway plans altogether. For instance, Walmart announced it’s getting rid of layaway for the 2021 holiday season. Instead, the company offers buy now, pay later (BNPL) options through its partnership with Affirm.
Layaway has typically been preferred by customers who don’t have the cash to pay for an item but don’t want to finance it with a credit card. When you put an item on layaway, the store will hold your items for you while you make payments on them.
Once you’ve paid for your purchases in full, you can take them home with you. In comparison, when you use BNPL options, you can take your purchases home with you immediately.
From there, you’ll make installment payments until the item is paid for in full. But while layaway comes with zero fees, BNPL options can come with an APR range between 10% and 30%. However, 0% APRs are available on certain promotional items.
Layaway had all but disappeared by the early 2000s, but the financial crisis of 2008 prompted many retailers to bring it back. As recently as 2018, 33% of shoppers said they planned to use layaway for their holiday purchases.
Many popular retailers are embracing BNPL options for customers as an alternative to layaway. BNPL is typically on items that cost $150 to $2,000. These financing plans are especially attractive to millennial and Gen Z customers who are more reluctant to take on credit card debt.
BNPL is seeing tremendous growth, and it’s currently the fastest-growing e-commerce payment. Well-known retailers like Best Buy, Sephora, Macy’s, and Apple all have embraced BNPL options.
If you’re considering offer BNPL financing to your customers, here are some of the biggest benefits:
National Business Capital is the #1 FinTech marketplace offering small business loans and services. Harnessing the power of smart technology and even smarter people, we’ve streamlined the approval process to secure over $1 billion in financing for small business owners to date.
Our expert Business Financing Advisors work within our 75+ Lender Marketplace in real time to give you easy access to the best low-interest SBA loans, short and long-term loans and business lines of credit, as well as a full suite of revenue-driving business services.
We strengthen local communities one small business loan at a time. For every deal we fund, we donate 10 meals to Feeding America!
Amanda is the Marketing Coordinator for National Business Capital. She’s a graduate of Ziklin School of Business at CUNY Baruch College and holds a B.A. in Advertising, Marketing, and Communications. Amanda has extensive experience creating content, directing outreach campaigns, and managing operations. She is passionate about small business and helping entrepreneurs reach new heights.