What has society come to? Are we so caught up in our need for instant gratification that we can’t wait two months to buy what we want?
Seriously, if a customer can pay off their purchase in four fortnightly payments, surely they could have been saving the same amount for two months prior and have the money to pay immediately.
Or decide what they want and then save for two months to get it.
From the business owner’s perspective, I understand that you’re offering a service to your customers.
The benefit for your business is making that sale or bringing it forward, which improves your cash flow, and that is always a good thing. The quicker you can turn around your stock and make your sales, the better your cash flow will be.
I get it, it’s an added service to your customers to encourage instant gratification, and when other retailers are offering the service, you’re crazy if you don’t too.
But where is the responsibility for ensuring that your customers aren’t over-reaching and spending more than they can afford?
Does this now mean that customers are spending more than they originally planned to spend because they can “pay it off” over the next two months?
As a society, it seems like we’ve lost the ability to save, the necessity to save up for what you want until you can afford it and then to only buy what you can afford.
Too many times, I see people being talked into buying higher priced items than what they originally intended to pay. They get caught up with the “better” item and the take it now and pay it later option.
I’ve certainly had my fair share of being talked into higher priced items, most recently when buying a new washing machine and dryer. I spent twice as much as I originally planned to, but I could afford to and paid in full on the day.
Afterpay appears to benefit the less financially secure members of society, those who go from one paycheque to the next or from one social security payment to the next.
I worry about what that means for society long-term. These people have very little in savings if they have any at all. Now we’re encouraging them to buy what they want to get their instant gratification and pay it off from their next four paycheques.
We should be encouraging savings and only spending what you can afford when you can afford it.
While Afterpay makes its money from retailers and service providers, don’t for a minute think that as a consumer you’re not paying those costs, in fact, everyone who buys is paying for this service.
Retailers who are struggling already, will, I no doubt, have increased their prices to cover the fees they pay to be part of this service and thus passing on the costs to all their customers.
So now, those who do save, or only purchase when they can afford to and who pay in full are supporting those who require instant gratification with their shopping.
Businesses, particularly retailers with bricks and mortar shops, need to think differently to continue to get sales. The competition from online retailers is disrupting the industry and isn’t going away. But is Afterpay the answer?
Perhaps retailers need to be considering whether they are solving the wrong problem with the right answer.
As a society, do we want to continue to encourage instant-gratification by providing ways for people to buy now and pay later, or do we want to be encouraging savings and purchases that people can afford to pay on the day?
Originally published on www.smallville.com.au