Author: Mark Denman

Leading retailers recognize the strategic importance of point-of-sale (POS) financing to attract interest-weary shoppers, especially during this period of uncertain economic conditions. When implemented correctly, POS financing becomes an essential tool to boost conversion and customer satisfaction. 

In May, the Federal Reserve reported that consumers are preparing for continued inflation, yet they remain undeterred from shopping. The April Survey of Consumer Expectations shows that spending is projected to grow by 5.2% over the next year. This underscores the importance of providing flexible and appealing financing options at the point of sale.

The Strategic Importance of POS Financing

A well-executed POS financing offer meets the customer at their moment of need, offering a fast and seamless experience. ChargeAfter data shows that merchants who adopt a multi-lender waterfall financing model with solutions for prime, near-prime, and subprime shoppers, can achieve up to 85% approval rates. This model ensures that a wide range of customers can access financing options that suit their credit profiles, expanding the potential customer base and increasing conversion rates.

Moreover, recent data gathered by ChargeAfter reveals that only 2% of retailers achieve at least 80% approval rates, highlighting the competitive advantage of implementing a robust POS financing strategy.

Multi-Lender Waterfall Model: A Path to Higher Approval Rates

To effectively meet the needs of their entire customer base, retailers must integrate multiple lenders covering the full credit spectrum into the points of sale. This multi-lender approach provides personalization and choice through various financing products such as private label credit cards (PLCC), revolving credit, installments, lease-to-own, buy now, pay later (BNPL), and B2B financing.

However, merely offering access to multiple lenders is insufficient. A well-executed POS financing offer must meet customers at their moment of need, whether they are shopping in-store, online, through call centers, or even in-home. It should provide a fast and seamless experience in real-time and deliver choice and personalization.

Integrate Multiple Lenders with an Embedded Lending Platform

To seamlessly integrate multiple lenders into omnichannel points of sale with a single application, an embedded lending platform is essential.  As well as delivering customers with instant access to the best-fit financing options, it provides numerous benefits for retailers. These benefits include fast and easy integration, comprehensive post-sale management, lender redundancy, visibility and control, and financing data in a single integrated solution. ChargeAfter is the platform of choice for America’s top retailers. In a single technical integration, ChargeAfter not only makes it easy to unlock a network of lenders but also removes the burden of managing multiple lenders, including taking care of sensitive PII, terms and conditions, disclosures, etc. 

Effective Marketing Strategies to Promote Financing Options

Of course, retailers need to communicate to buyers that financing is available within the shopping journey. One way to do this is through marketing campaigns. Another effective way is to communicate with shoppers throughout their purchasing journey. For example, retailers can add promotional widgets on their eCommerce websites, embed financing into the checkout process, and invite customers to apply for pre-qualification, which can also be used in-store. In-store signage with QR codes enables customers to apply for financing on their mobile devices, facilitating purchasing decisions.

Signage regarding POS financing availability at self-checkout and traditional checkout ensures shoppers can confidently continue their journey, knowing that POS financing can help them buy the desired goods. In the context of persistent inflation and evolving consumer spending habits, retailers must adopt diverse financing options to attract and retain customers.

The Competitive Advantage of Embracing Innovative POS Financing Solutions

Retailers who embrace innovative POS financing solutions will be well-positioned to drive sales, boost customer satisfaction, and maintain a competitive edge in the market. By adopting a multi-lender waterfall model through a platform, retailers can offer a seamless and personalized financing experience that meets the diverse needs of their customers. Effective marketing strategies further enhance the visibility and appeal of these financing options, ensuring that customers are well-informed and confident in their purchasing decisions. ChargeAfter is the platform of choice for America’s top retailers.

Mark Denman

EVP Merchant Sales & Success

About Mark Denman

Mark has worked in the near-prime and tertiary lending space for 30 years. As EVP of Merchants Sales & Success at ChargeAfter, he is responsible for ensuring merchants and lenders get the best care possible.

In today’s fast-paced retail environment, ensuring customers have seamless access to  financing choices is critical to boosting sales and building customer loyalty.  The ability to pay for goods over time through financing can be the deciding factor when completing a purchase. This is especially true during this period of inflation when people are more protective of their resources. Even without inflation, consumer demand for financing is likely to continue as credit cards drop in popularity with younger generations. 

One of the consequences of the rise of demand for consumer financing is that it has become impossible for merchants to create and manage an exceptional financing offer in-house. To manage a robust financing offer, retailers require a technology partner to integrate point-of-sale financing into modern customer journeys. This solution is best provided by a platform that can meet the needs of diverse customer profiles while being fast and easy to use for customers and merchants alike. Implementing the right consumer financing platform has become a strategic must for merchants. 

For leading merchants, ChargeAfter is the platform of choice. Here are seven reasons why.

7 Reasons Why Leading Merchants Choose ChargeAfter 

1. A seamless omnichannel financing experience
2. Expansive Network of Lenders
3. Easy integration and management
4. Unwavering Compliance and Security
5. Higher Approval Rates Equate to Increased Sales
6. Actionable Analytics and Data
7. Customize with White Label Consumer Financing

A Seamless Omnichannel Financing Experience

Your customers expect a seamless, omnichannel purchasing experience, especially for big-ticket items. Some customers start their purchasing journey online before heading to a brick-and-mortar store or interacting with a call center. Your financing offer must be embedded into these omnichannel journeys. Your offer must also be flexible enough to meet your and your customer’s needs and not be tied to rigid experiences, such as in-store stands serving a long line of customers.

ChargeAfter enables this with a state-of-the-art customer-facing application. It makes it easy for you to offer different ways to access financing choices at every point of sale. This can include a QR code in-store or online, sending customers a link to apply, promotional links on your eCommerce site, online pre-approval, and in-store devices – whatever works best for you and your customers.

Expansive Network of Lenders

With over 40 lenders embedded into ChargeAfter’s platform, you can easily offer your customers access to diverse financing products that to cater to every consumer, regardless of their financial standing. As a result, your approval rates are likely to increase to up to 85%. 

Especially during economic fluctuations, having a diverse range of lenders, including B2B financing options, ensures every customer is included. The platform also offers merchants the flexibility to introduce their preferred lenders. Such an expansive network ensures that you remain resilient against individual lender decisions and allows you to capitalize on every sales opportunity.

Easy Integration with Waterfall Finance Methods

The platform stands out with its simplicity. Merchants can enjoy easy integration of this embedded finance platform into their systems. ChargeAfter uses a waterfall finance method that instantly matches customers with the best lending offers suited for their credit profiles. Additionally, its post-sales management features—dispute resolution, refunds, and reconciliations—provide real-time insights. Such embedded financing ensures that merchants and consumers can transact with ease and speed.

Customize with White Label Consumer Financing

ChargeAfter’s white-label POS system allows customization for businesses prioritizing brand identity, reinforcing brand loyalty. Whether you’re seeking a white-label BNPL solution or comprehensive white-label consumer financing, ChargeAfter has you covered.

Unwavering Compliance and Security

Data security, especially in e-commerce financing, is paramount. ChargeAfter’s commitment to both transactional and personal data security is exemplary. Their platform ensures that every piece of data, from credit details to personal identifiers, is guarded against potential breaches. Furthermore, they adhere to all financial regulations, both federal and local. This commitment to embedded finance solutions, combined with unwavering security protocols, ensures merchants can focus on selling, free from the hassle of intricate financial regulations.

Higher Approval Rates Equate to Increased Sales

Through its multi-lender setup, ChargeAfter revolutionizes POS financing. With a broader spectrum of lenders, consumers enjoy a higher likelihood of loan approval, motivating them to finalize their purchases. This embedded lending approach ensures sales and makes your offerings more accessible to a broader audience.

Actionable Analytics and Data

Data-driven insights are crucial for improving customer experiences and optimizing sales strategies. ChargeAfter offers comprehensive analytics, allowing merchants to understand their customers’ buying journeys. Whether it’s identifying drop-off points or successful conversion moments, these insights enable the optimization of the POS lending process.

Case Study: Jerome’s

The success story of Jerome’s Furniture, a legacy brand with over six decades of experience, has been profoundly enriched by its partnership with ChargeAfter. Jerome’s astute integration of ChargeAfter’s consumer financing platform showcased how forward-thinking strategies can lead to exponential growth, even during economic uncertainties. With a commendable 67% increase in customer financing adoption, Jerome’s has ensured its clientele can afford quality furniture without financial strain. This case study underscores the pivotal role consumer financing plays in modern retail, exemplifying how strategic collaborations and a focus on customer-centric solutions can yield impressive outcomes.

Want to delve deeper into Jerome’s Furniture’s remarkable growth journey with ChargeAfter? Download the complete case study and discover the transformative power of consumer financing in the retail sector. Grab your copy now!

In conclusion, as merchants search for an efficient point-of-sale financing platform, ChargeAfter emerges as a frontrunner. Its focus on omnichannel lending and features like white-label BNPL solutions and waterfall financing ensures that merchants and consumers enjoy unparalleled experiences. In the evolving world of consumer finance and in-store financing, having a partner like ChargeAfter can be the game-changer that sets a business apart.

About Mark Denman
Mark has worked in the near-prime and tertiary lending space for 30 years. As EVP of Merchants Sales & Success at ChargeAfter, he is responsible for ensuring merchants and lenders get the best care possible.

As the retail landscape rapidly evolves, one financial trend has emerged as a game-changer, satisfying the ever-increasing demands of modern shoppers: point-of-sale financing. Point-of-sale financing has garnered significant attention in recent years because it provides shoppers with instant purchasing power, flexible payment options, and simplified access to the goods and services they desire. This article explores the rising consumer demand for point-of-sale financing and delves into the factors contributing to its popularity. From its seamless integration into the shopping experience to its appeal to a broad spectrum of consumers, we delve into the 5 most common mistakes retailers make with their consumer financing offer. 

The 5 Most Common POS Financing Mistakes Retailers Make

1. Working with a single lender
2. Ignoring the omnichannel experience
3. Providing a fragmented customer experience 
4. Overlooking the value of financing data to build customer loyalty
5. Adding additional lenders without using a platform

Mistake 1: Working With A Single Lender

To cater to their diverse customer base and offer the most favorable lending options, retailers must collaborate with multiple lenders catering to various credit profiles. Lenders typically specialize in specific customer segments, such as prime, near-prime, or subprime, and specific loan products like buy now pay later (BNPL), 0% APR, short/long-term installments, lease-to-own, etc. Additionally, geographical coverage is another aspect, as lenders typically only serve one region.

When a retailer relies solely on a single lender, it poses challenges. For instance, if a shopper is declined for a loan at the checkout stage, they have limited alternatives and are likely to abandon their shopping cart. This results in a lost sale and customer, as they might be deterred from future purchases. Moreover, if the lender with whom the retailer exclusively works changes their terms or ceases operations, they find themselves in a difficult situation without alternative lending options.

Research by Snap Finance published in Yahoo finance in March 2024 reveals that almost 50% of consumers with credit challenges will avoid purchasing from stores that do not supply them with financing options. 

Mistake 2: Ignoring the Omnichannel Experience

It’s often said that one should never put all their eggs in one basket, and this is especially true when it comes to the sales experience. Customers are, in the end, individuals with different preferences when making purchases. It is important to offer a consistent experience regardless of how the consumer engages with your business.

Whether your customers are using an app, website, or physical store, they should enjoy a consistent experience, including when it comes to point-of-sale financing, regardless of how they choose to access your services. Shoppers who rely on financing to make a big-ticket purchase, for example buying furniture, will likely prefer to apply for financing online from home before heading to the store with their pre-approval to complete their purchase. This translates into other purchases that customers know they can’t access without financing and where they want to avoid the embarrassment of in-store declines.

To provide a seamless omnichannel experience, it is equally essential to strategically offer point-of-sale financing options across various customer interaction points, not merely at checkout. In-store, this can include QR codes that are displayed throughout the store where customers can apply in advance on their mobile devices, as well as at self-checkout, or at traditional checkouts.

 

Mistake 3: Providing a Fragmented Customer Experience

While an omnichannel financing experience is critical, it isn’t the only barrier to a fragmented customer journey. When retailers fail to establish a streamlined process for loan applications and approvals, especially when integrating more than one lender into their offer, the result is a frustrating experience for customers. 

Consider a shopper applying for a loan at the point of sale, which gets declined. If the retailer offers more than one lending option, the customer who wants to continue looking for a loan has to start the application process all over again with a different lender. This repetition not only adds unnecessary inconvenience and time consumption for the customer but also creates a sense of frustration and confusion.

This poor experience leads to customer dissatisfaction, a loss of trust in the retailer, and potential purchase abandonment. Retailers should prioritize integrating their financing options into a single platform to establish a cohesive process that ensures a seamless customer experience, minimizing the need for multiple loan applications and reducing the likelihood of customer frustration and disengagement.

Jerome’s Furniture, a discount furniture chain store in Southern California, achieved a 67% increase in consumer financing adoption with high approval rates by embracing consumer financing as part of the customer journey with ChargesAfter’s embedded lending platform.

Mistake 4: Overlooking the Value of Financing Data to Build Customer Loyalty 

Data about customer financing is an invaluable asset that can help retailers make informed decisions across various aspects of their operations. By harnessing insights derived from customer financing data, retailers can enhance their marketing strategies, identify upselling opportunities, and optimize their lenders.

Customer financing data provides a comprehensive understanding of customer purchasing behavior and preferences. By analyzing this data, retailers gain insights into which products are most commonly financed, the preferred financing options, and the specific factors influencing customers’ decisions. With this knowledge, retailers can tailor their marketing strategies to target the right audience, showcase relevant products, and optimize promotional campaigns to resonate with customers’ financing preferences.

Access to individual shoppers financing data is a powerful way for retailers to build personalized customer relationships and highlights upselling opportunities. By analyzing shoppers purchasing patterns and financing histories, retailers can identify customers who have previously financed products and can invest in higher-priced items. With this information, retailers can personalize their sales approach, offer attractive financing options, and guide customers toward upgrading their purchases. This boosts revenue and enhances customer satisfaction by providing tailored recommendations based on their financial capabilities.

Moreover, retailers can leverage financing data to collaborate with lenders and optimize partnerships that provide their customers with the most successful financing options.

Mistake 5: Adding Additional Lenders Without Using a Platform 

Adding additional lenders without using a point-of-sale (POS) platform contributes to a poor customer experience and makes managing post-sale processes such as refunds, reconciliations, and disputes exceptionally complicated. Without a centralized system, each lender operates independently, making it difficult to streamline and coordinate these critical activities. 

Without an embedded lending platform, managing post-sales transactions becomes a cumbersome process. Each lender may have different refund policies, procedures, and timelines, making it hard to ensure consistent and efficient processing. Reconciling transactions across multiple lenders becomes equally complex, as there is no centralized mechanism to track and match payments, leading to potential errors and discrepancies.

Handling disputes becomes a more arduous task as well. Without a unified platform, resolving issues requires interacting with each lender separately, prolonging the resolution process and causing frustration for customers and retailers. The lack of streamlined communication channels and standardized dispute-resolution procedures can result in inconsistent outcomes and an unsatisfactory customer experience.

Additionally, compliance becomes more complicated without a platform. Each lender may have its own regulatory requirements, and managing and ensuring adherence to these varied compliance standards can be daunting. This increases the risk of non-compliance and potential legal issues for lenders and merchants.

Conclusion – A Platform-First Solution

Retailers are increasingly turning to ChargeAfter to embed multiple lenders into a single platform that is easy to integrate and manage to avoid making these 5 point-of-sale financing mistakes. 

The multi-lender approach increases the likelihood that shoppers who seek financing will be approved, with approval rates reaching up to 85%. Unlike single-lender systems, multi-lender platforms meet the needs of shoppers across the credit spectrum, enabling more customers to make purchases through a fast and seamless experience. This broader access to financing options enhances the customer experience, fosters loyalty, and ultimately drives higher sales and AOV. 

Moreover, the embedded lending platform empowers retailers to offer competitive financing terms to their customers. With different lenders integrated into the platform, they can cater to individual customer preferences, enhance their value proposition, and stay ahead in a competitive market.

In addition to customer benefits, ChargeAfter streamline the financing process for retailers. Rather than managing multiple lender relationships and systems, retailers can leverage a single platform that consolidates the entire financing workflow. This simplifies operations, reduces administrative overhead, and saves valuable time and resources.

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