Installments for Luxury purchases

How do luxury brands attract new customers?

When it comes to financing high end shopping, whether online purchases or in store, shoppers typically are required to make the complete payment before they leave the store. Enter buy now pay later, BNPL for short, payment options.

Considerations for implementing BNPL options in a luxury store

Buy Now Pay Later is an alternative payment option that allows shoppers to make a purchase and pay for it over time in monthly payments, usually with zero interest.

This is highly convenient for those running a high end store who want to provide other payment options for large purchases. When it comes to luxury shopping, one Gucci item could become a large purchase, for example. Whether with in-store or online shopping, financing your love for big brands can be tricky. There are different types of BNPL or installment options that you need to consider:

1. Traditional BNPL – These are third-party lenders, such as Klarna or ZIP, that offer loans at the point of purchase allowing shoppers to split their payment into typically 3 or 4 installments. Customers must apply for the loan through a third-party app, and upon approval, they complete the checkout process on the merchant’s website. Loan amounts are often capped, or they may incur interest charges, making these options more appropriate for lower-value goods and services. Many of these services also charge late fees if consumers miss a payment.
2. Card-linked Installments – Solutions like Splitit allow customers to use their existing credit card to divide their purchase into smaller payments. This option requires no application, redirects to third-party websites, or added interest and no late fees. Shoppers simply enter their credit card details and choose the number of installments that fit their budget, typically ranging from 3 to 12 payments. The purchase amount is only limited by the shopper’s credit card limit, offering greater flexibility.

Buy now pay in-store using monthly installments for luxury brands

Installment payments services can be used in a luxury store to encourage more customers to shop. Indeed credit card-linked installment options provide customers with a different solution to finance their next purchase without worrying about hidden fees, late fees, or their credit score. This essentially increases access to brands like Gucci, Vestiaire Collective, or Faberge, for example, that would otherwise be too expensive.

Why does every store that sells luxury brands need card-linked installment services at checkout? The days when only the most wealthy customers could shop for luxury products are long gone.

Transform luxury shopping one store at a time

Card-linked Installment payments start a new era in the luxury store sector where a larger audience group can access luxury and define style from their first order. So, if you implement a card-linked installment solution, you can expect to increase sales in your store.

You don’t change prices in your store, you make it easier to pay in store

Your luxury store doesn’t need to compromise on costs. Aspirational customers might not otherwise be able to afford luxury products without a payment installment option. This helps to increase brand equity without eroding the prestige of the store. BNPL services are particularly significant for Gen Z, who prefer its convenience.

Your store gets paid the same

When you sign up for a buy now pay later or a card-linked installment service, the technology provider typically pays for the purchase at your store, whether online or offline, at the time of checkout. The service provider, on the other hand, will be paid based on the agreed payment plan, whether two, three, four installments or more. 

You don’t compromise on your brand equity

With white-label installment providers like Splitit, you can maintain a clean and uncluttered website and checkout experience, free from additional logos. Additionally, you retain full control over the customer journey and their data, as there are no third-party apps or sign-up processes involved.

Card-linked installments provide a more responsible finance options for customers in your store

Why does someone decide not to shop for luxury items? Because they are trying to manage their money. But enabling them to pay later at your store, without having to take out a new loan to afford the purchase, means they are more likely to shop for luxury products without putting their cash at risk. The bottom line: The right kind of BNPL option can attract more people to your store.

More rewards for your customers and greater loyalty for your store

Customers enjoy using their credit cards to earn rewards and perks. By offering them the option to split payments into manageable installments while still earning credit card rewards, you can boost customer satisfaction. This satisfaction often translates into increased loyalty and repeat visits to your store.