Like "buy now pay later" a layaway service targets low income customers. People who want to buy something but don't have the money all at once to do it.

I don't think "digital layaway" would be possible since a big part of why this service ever worked was the shopkeeper having your item up on the layaway shelf waiting for you.

Layaway also had predatory aspects, but it seems much less horrible than these modern services.

Like "buy now pay later" a layaway service targets low income customers. People who want to buy something but don't have the money all at once to do it.

I don't think "digital layaway" would be possible since a big part of why this service ever worked was the shopkeeper having your item up on the layaway shelf waiting for you.

Layaway also had predatory aspects, but it seems much less horrible than these modern services.

@futurebird It seems like most consumer debt products generate no profit unless/until the debtor gets behind on payments? Terrible alignment of incentives there.

@fivetonsflax

OK the hilarious thing is these new “micro credit” services eg. klarna are NOT making a profit even with the most predatory of terms. They do zero work on approving their loans (they would howl and cry at me for calling them loans — but who are we kidding here?)

Anyway they have like a 50% default rate and maybe they get the principal back but NOT all the fees they fantasized about.

So these lenders are now junk companies.

Like being a casino and losing money.

@futurebird @fivetonsflax I know someone who worked for one of these companies. Well paid and liked the job OK, but they eventually quit because they were like “the financials of this company don’t make sense, and it’s not going to stick around.”

Do any companies offer "layaway" anymore? It seems almost quaint and responsible in the landscape of "pay in 4" (klarna afterpay et al) "buy now pay later"

@futurebird last I knew, Walmart still did layaway but they may have gotten rid of it. GameStop basically does layaway for pre-orders. You can pre-order the item and pay on it until you pick it up.

@sidereal @fivetonsflax

If they set up a little table and were lending 20 bucks to anyone who walked up and gave them $5 no one would invest in that. It’s a terrible idea. It’s not enough money to chase a person for and it’s not enough for them to even remember. “technology” is meant to be the magic sauce to fix this but one must as why the sellers don’t want to do that themselves? It’s a horrible idea.

@futurebird @sidereal @fivetonsflax I think we need to re-normalise people saving up to buy things, and 'being able to afford it' NOT meaning 'being able to make the repayments'. A year ago, I commissioned a professional to make me a ukelele. His terms were simple - 50% to start (which gives him the assurance you actually will buy it, and covers all the costs of materials), and 50% when finished. I had calculated what I could afford, and when, and it works.

@UkeleleEric @futurebird @sidereal some are using BNPL for non discretionary purchases like groceries and clothes. The economy is not meeting people’s needs.

@fivetonsflax @UkeleleEric @sidereal
Ben, this is what I thought as at first, however, on closer examination, I think it’s being used to spur additional impulse purchases. Your local loanshark or payday lender tends to fill the gap that you’re describing more often. I think people are more considerate about taking out a loan than they are simply paying in a different manner and maybe making an additional purchase.