A few months back we wrote a blog describing a "layaway" service called Afterpay. Afterpay is an Australian based company that allows you to make purchases and pay it off over four easy installments. While the retailer gets paid in full, you get the product right away without paying full price.
Sounds an awful lot like a credit card, right? But, they get you with their lack of interest or application process. "Don't have the money now? You will have it in two weeks...right?" Eh, maybe not.
Fun fact, only 37% of millennials have a credit card. For the rest of us, there is Afterpay.
Turns out, Afterpay makes a lot of its money off of people NOT having the funds again in two weeks. Every time Afterpay charges and there are no funds in the account, they make five dollars. Most moms will tell you before you get a credit card if you can't afford to pay it off now - you shouldn't be buying it at all. (Sorry, mom.)
The real kicker is the fact that you get too comfortable spending money.
As an Afterpay addict I dread the text I get saying I have a withdrawal coming. It's even worse when I get the texts three days in a row for different withdrawals. FYI these are dates on my actual text thread with Afterpay.
Just when I think my bank account is set up for success, Afterpay hits me with the charges. Half the time, I'm already over whatever I bought, but I'M STILL PAYING IT OFF a month later.
How do they get you? Highly effective digital marketing. Sites everywhere advertise with Afterpay. And it works. I've gotten email marketing campaigns that I click to their site because they advertise Afterpay. Thanks Tarte, I definitely needed a 15th Lip Paint.
I haven't even mentioned the constant barrage of retargeting ads I get from the Afterpay site itself. Every time I get on social media, I'm reminded of all the Steve Madden shoes I can buy now and pay for later.
Because of Afterpay and the constant marketing pushes, consumers spend more money than they would without it. Using creative content and constant reminders, the company is able to persuade you that you need something now, regardless of if you really do. This is great news for the businesses leveraging it, and sad news for the rest of us.
That being said, maybe as a business owner, it's time to consider offering Afterpay.
Afterpay states that over 25,000 retailers use their services. They say this has increased the average order by 20-30%, and increased conversions by up to 22% for those retailers. This concept has created loyal customers (like me) who keep coming back to their favorite brands, spend at least $35, and get a convenient way to pay for these goods. As much as I can say I have been sucked into an endless cycle of purchase and payment, it definitely has perks. I can't blame businesses for jumping on board!
So, my advice to all you almost Afterpay addicts: stop while you're still ahead. Just buy the thing outright if you want it. If you can't afford it now, wait. I've sworn off Afterpay entirely for 2020, but then... I discovered Sezzle. Stay tuned for my next inevitable confession.
Have questions about selling online? Contact us.
The average person spends nearly 20 hours a week on social media. How does yours rank?
Powered by Caffeine + Cocktails