IT and Business Insights for SMB Solution Providers

Pros and Cons of POS Financing: Page 2 of 2

“Buy Now, Pay Later” options can potentially help custom PC makers sell more devices without taking on more risk. By James E. Gaskin

There can be some downsides to BNPL that customers should be aware of as well. For instance, some financial experts warn that the protection for returns and warranties is not as good as what credit card companies offer. In addition, there are no federal regulations to protect the consumer. And depending on the provider and the customer’s credit rating, they may have to put down 25% of the price up front.

Still, according to Sezzle's statistics (which apply to all consumer businesses, not just technology), offering POS financing increases the average order value by 32%, with 40% fewer returns. Plus, says Katz, consumers feel a retailer with installment payments is more trustworthy and cares about its consumers more than other dealers. "This is a positive halo effect for brands."

Bach likens his adoption of POS financing to offering multiple shipping options. "It's our job to give the customer what they want."

Image: iStock

About the Author

James E. Gaskin's picture

JAMES E. GASKIN is a ChannelPro contributing editor and former reseller based in Dallas.

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