Buying a house or condo is the most important financial decision that most of us will ever make. It takes a special degree of commitment, dedication, savings, financial expertise … and luck … to reach that level of achievement. Unfortunately, only about 64 percent of American families currently own homes.
First-time home owners have a whole new list of things to deal with — mortgage payments, property taxes, home insurance, yard work, and who knows what else! Owning a home is not for everyone, but for many people, it is a lifelong dream.
When people buy their first house, they are typically starting with a blank interior canvas. Their goal is to “make a house a home.”
Thus, one of the first places that they are going to visit is the local furniture store where they will be tempted by a huge selection of just about every kind of item imaginable. The furniture store is a magical place that can make dreams come true. But at some point, consumers have to come back down to reality and figure out a budget so they can live within their means. Furniture stores can help.
Affordable Furniture Stores Can Help Consumers
As a furniture store owner or manager, you can really help consumers by identifying the essentials that they are missing. Everybody needs a kitchen table, for example, or a crib if they are expecting a baby in the near future. A few functional pieces will fill out the place. Examples include a large area rug and a sofa, which makes the home look cozy and inviting. And you can also recommend some “extras” to help make a house into a home.
For instance, every room is going to need some kind of lighting besides just overhead lights. And every home is going to need some kind of window treatment, such as drapes or blinds, to keep out the sun and give some privacy. As a furniture store owner, why send customers somewhere else when you can sell those items yourself as part of the whole package?
Of course, most consumers are on a budget, so they will want to take advantage of techniques such as price-matching policies, coupons and seasonal sales. Furniture stores typically cut prices during holiday sales such as President’s Day or Labor Day weekend.
Timing is Everything to Furniture Stores
Furniture stores need to move older stock to create space for the latest new designs. For indoor furniture, sales are in the Spring and Fall. New indoor styles are typically released in February, so January will be a sale month. However, not everybody who lives in a cold climate is going to want to move furniture while it is snowing and freezing cold outside. Thus, July is about the best sale time for pre-made furniture for summer discounts.
Outdoor furniture, of course, is on a different schedule. New styles will arrive mid-March to mid-April, and furniture store dealers will want to clear it out by August before Winter sets in.
If you have done a good job of choosing your vendors and your inventory, finding things to please your customers won’t be an issue. But figuring out how your customer is going to pay the bill — now that requires some creative thinking.
How Do Consumers Pay for Home Furnishings?
Right off the bat, let’s agree that there are a few payment types that will NOT serve every consumer, and you should avoid them if possible.
First is to create a 90 days same as cash “teaser” offer without pre-qualifying the customer. Ninety days same as cash may work fine for some customers, but not all. For the other half, however, it will turn out to be a debt trap because they cannot pay off the entire bill in 90 days and interest reverts to “day zero” at 26 percent. You now have an unhappy customer who feels they were tricked by this offer because they are going to revolve the charges for years to come. They will tell their friends how unhappy they are with this arrangement. This translates to no repeat business and no referral customers. You don’t want that.
Another bad idea is for the consumer to get a credit card with a no-interest promotional period because this is the same thing as what we just discussed. It will work fine if the consumer can realistically pay it all off before the promotional period ends, but not for those who cannot, which will be about 40 percent of the people. This is another debt trap!
A third bad idea is a rent-to-own plan which is the most expensive alternative for the consumer. As a matter of fact, the Federal Trade Commission actually warns against it.
If your goal is “no unhappy customers” (and why wouldn’t it be), you will want to prequalify the customer and make sure they can pay it off in the allotted period so they don’t get caught in a debt trap.
By now you are wondering what is the most consumer friendly payment product that also minimizes expenses related to the sale for you, the store owner?
The answer is, not surprisingly, CrossCheck’s Multiple Check service. Here’s how it works.
Win-Win Payment Options for Consumers and Furniture Stores
Consumers will often not have the full purchase amount when they come to the store, but they could come up with the funds if you gave them time to replenish their checking accounts. You ask them if an extra 30 days (sometimes 45) would be helpful, and tell them about Multiple Check.
You ask them to write 2 – 4 checks and specify the dates that they want each to be deposited over the next 30 days. You pull up our Merchant Check Center on the PC, enter a few pieces of information (e.g. the amounts chosen by the consumer and the deposit dates), and scan the checks in an imager that we loan to you without fees. When that is done, you give the checks back to the consumer with a receipt.
CrossCheck does not ask consumers to fill out a credit applications, nor do we ask them to pay interest. We stand in the background and make the sale happen for home furnishings dealers, but are almost invisible to consumers.
To make things even easier, we do the banking for merchants who bundle Multiple Check with Remote Deposit Capture (a type of electronic processing), so they don’t have to take checks to the bank or remember when to deposit them. On top of that, our fee will be half of what merchants are paying to take credit card transactions! That is a big savings on a $3,000 order for something like a bedroom set. Think about that for a moment.
Remember, if you take multiple credit card payments for future processing, there is no guarantee that there will still be an open to buy on them when they are submitted. They could be declined!
On the other hand, each check submitted via Multiple Check is guaranteed by CrossCheck, so you get paid even if they bounce for NSF or UCF.
Multiple Check is even better than layaway programs because consumers take their items home on the purchase date. This is the kind of program you need to help sell more furniture and to create happy customers who will keep coming back because, after all, you helped them make their house into a home!
Download our free guide to learn more about Multiple Check.