"Bill Me Later" and Lay-Away QUESTIONS

[kojimapearl]

Greetings from an extra humid Hong Kong,

I am not sure where to post this thread, but I am wondering if some of you online retailers, and online shoppers would help me navigate the world of "Bill Me Later" and Lay-Away.
I am relatively new to on line retail sales, and having been in the wholesale pearl world for so long, I am having trouble trying to decide whether or not to offer these two payment plans as options for Kojima.
Recently (and accidentally) I highly offended a customer when I suggested that "Bill Me Later" was nothing but another credit card (which we do accept)..... and as for Lay-Away, I am just on the fence, as it seems like it could turn a sale into a long term and potentially messy situation.
I was hoping that some of you would share your experiences and thoughts on the subject.
I am usually quite decisive, but on this issue, I feel myself fluctuating.
I appreciate in advance any and all suggestions, stories, and thoughts on these subjects.
Cheers, Sarah

 

[Heidi]

Bill me later really is just another form of credit, you are completely right. Since my personal experience is in sales and management for bricks and mortar stores, I don't have any experience with that request. Paypal offers credit, so it seems unnecessary in an online environment. Curious to hear what others think.

I can address lay-away from a retailing/merchant perspective but similarly leave the e-commerce aspect to others. Almost all the smaller brick-and-mortar stores in our region offer this and it usually comes with minimum terms like 30% NONREFUNDABLE deposit and the balance due within anywhere from 60-90 days. In terms of tracking sales, we always found it a little odd because in a b&m store you base a lot of things on daily goals and a lay-away doesn't accurately represent that. Now, as a shopper I appreciate lay-away because it allows me to save (in a sense) for a specific item and not be tied to the world of revolving credit cards for bigger purchases. Sale items are often not elegible for lay-away.

 

[pearlescence]

I would not touch either. Too much scope for messy and expensive outcomes.

 

[pattye]

Most of us do not have large enough businesses to offer those sort of options. It certainly complicates bookkeeping. My recommendation would be to say "my accountant won't let me do it", which is true! Always helps to credit a third party as the authority. Taking credit cards should be enough.

When I worked for Nordstrom Fine Jewelry they offered a payment plan, but hey, they are a large chain. This was in the mid 90's and no down payment was required. Usually took about 45-60 days before the first payment was due.

Not totally relevant but True Story---One couple in their 30's came in and purchased a beautiful purple sapphire 4+ct ring as their engagement ring. Then they had a big fight and returned it--never had made a payment. A few weeks later they made up, bought the ring again, set up credit again. Fought again, returned the ring, etc. This happened 5 times over the course of 7-8 months. We dreaded seeing them coming our way! Sometimes they had a big fight right there at the counter!! They never made a single payment!! Finally management said after the 5th return they couldn't buy it again!! And it was sent away-----far away-----

Especially with one of a kind jewelry, it probably isn't good business to have it tied up in layaway either, even with a sizable non-refundable deposit.

 

[GemGeek]

I bought an expensive bracelet on layaway from a Gem Faire vendor. They said they only offered it to their good regular customers. We negotiated a one third down payment with one payment in one month and one payment the following month to pick it up. For them it was an issue of trust. Even though they kept the merchandise, they had to keep it separate from their regular inventory and carefully document the transaction. Hope that helps.

 

[Heidi]

Most of us do not have large enough businesses to offer those sort of options. It certainly complicates bookkeeping. My recommendation would be to say "my accountant won't let me do it", which is true! Always helps to credit a third party as the authority. Taking credit cards should be enough.

When I worked for Nordstrom Fine Jewelry they offered a payment plan, but hey, they are a large chain. This was in the mid 90's and no down payment was required. Usually took about 45-60 days before the first payment was due.

Not totally relevant but True Story---One couple in their 30's came in and purchased a beautiful purple sapphire 4+ct ring as their engagement ring. Then they had a big fight and returned it--never had made a payment. A few weeks later they made up, bought the ring again, set up credit again. Fought again, returned the ring, etc. This happened 5 times over the course of 7-8 months. We dreaded seeing them coming our way! Sometimes they had a big fight right there at the counter!! They never made a single payment!! Finally management said after the 5th return they couldn't buy it again!! And it was sent away-----far away-----

Especially with one of a kind jewelry, it probably isn't good business to have it tied up in layaway either, even with a sizable non-refundable deposit.

Oh my....I cannot imagine. We did have some people put down what were, at the time, sizeable deposits only to leave the layaway items past the deadline. That introduced its own weirdness regarding stock balancing. In retail, after a few months, you're basically paying a lot of money to store items that haven't sold.

 

[kojimapearl]

Thank you VERY MUCH ladies. I am no longer on the fence about this.
I am glad I asked... great responses ...
Pattye, ahhahhhhhhh too bad there was no You-Tube in those days eh? That story would have made an awesome short movie!
Feeling very thankful to have this forum as a place to work out these icky little issues!
Cheers, Sarah

 

[waimeamomi]

I only do lay-away for my friends. It's more of a time-payment thing.

 

[pattye]

Yes, agree with Sheryl and Blaire, one always has the option of doing something exceptional for those good regular customers and trustworthy friends.

 

[fresh-pearls]

say "no"

say "no"

if a retail customer needs to ask for credit from a small store, he/she may not be able to get consumer credit elsewhere. you have good instincts, and probably hesitated for a reason. you are not the kind of retail business that builds a lot of uncollected accounts into your costs. if the customer doesn't feel good about making an upfront payment, he/she may not respect your need to be reimbursed for your costs on a timely basis.

 

[kojimapearl]

Thanks for that Pearlsintime. I have been confidently telling people since I started this thread that it's just not something I can do for many reasons.. and so far my wonderful customers have been very understanding. I really am blessed with lovely people to work with about 99% of the time!
It's such a delight to have this forum to bounce ideas around in! Thanks for the support!
Cheers, Sarah
(just to pick your brain a little bit.. what industries/niches was it most useful for??)

 

[kojimapearl]

Thanks Pearlsintime... That sounds icky icky icky..... I would much rather people buy less expensive pearls from Kojima, and look at them and smile for the rest of their life, than have our pearls be a reminder of a slippery credit deal gone wrong... especially if the culprit was a greedy credit company!!
Cheers to you and thanks for the info!
Sarah

 

[jas932]

Lay Away Idea

Lay Away Idea

I offer lay-away in my business, and have for years. But I handle things differently than the industry norm, because I control the payments.

The customer can choose how long the term is, from 2 months to 6 months. I keep a copy of their credit card and once a month I charge their card (I will also take checks, signed and post dated, and once a month will cash a check). Normally the first month is a larger amount (it'll include shipping). At the end of the term I ship the piece.

For my elite customers, they can take the piece with them.

I have sold thousands of $$ worth of jewelry by offering this payment plan. Customers love the option, especially for purchasing expensive items. Smaller monthly payments are easier to handle for many.

I first started offering this after purchasing a Bose wave radio. Bose sent me the radio and charged my credit card $100 a month for 6 months. Done deal.

I have been doing this for many years and encourage others to reconsider offering layaway plans.

good luck
julie.