Buy-now-pay-later (BNPL), has been getting a lot of hype, including a 2021 announcement that Amazon has partnered with Affirm to offer this service to their customers (of note: Affirm IPO’d in 2021). BNPL initially caught my interest because I know many practices (including my own) that use a form of layaway to help sell contact lenses and/or glasses. These practices accept half of the purchase price to order, then collect the other half once the patient picks up their order. The point being that by helping some patients split up their payments you may convert sales that otherwise may have walked. 

 I think of BNPL solutions like Affirm and Sunbit as a cross between layaway and a credit card. They provide micro loans for a specific purchase without a hard credit pull. But does a BNPL solution make business-sense for a practice? Certainly Amazon and many other businesses are now offering BNPL as an option, but how do we decide if it is right for our practice? 

To start answering “does this make sense?”, I considered the difference between layaway and BNPL from an administrative perspective. For layaway, the practice has to continue to manage inventory that is partially paid-for and is at risk of the patient never coming back to finish the transaction. It’s a burden, as your transactions sit in a sort-of “sales purgatory”. BNPL closes the sale for the practice, delivering the full purchase price (minus fees) while letting the patient go with their purchase—no extra inventory management required. The fees are not zero, however, they usually aren’t much more than a typical credit card processing fee for patients with decent credit.

Should You Replace Your Layaway System with BNPL?

What about the difference between layaway and BNPL from a patient experience perspective? For receiving their purchase, it’s an easy win for BNPL–layaway prevents the patient from receiving their goods until it is fully paid-for, while BNPL enables the patient to receive their goods now, like a typical purchase. 

However, what I think is more important to consider is how layaway can be problematic from a patient-relationship perspective. On one-hand, your practice has done the patient a favor by allowing them to break up their payments over time, however, consider how you personally feel any time you are indebted to another person when they do you a favor? You are appreciative, and yet it’s an awkward position to be in socially. Add to that the fact your practice is withholding product that isn’t usually a mere “want”, like a new coffee table, and instead is a “need” i.e. vision. Lastly, layaway is an opportunity for your practice to create customer-service fails. For example, staff dropping the ball on following up the patient, repeated invoices being mailed out, letting the patient go without receiving full payment and then having to call to collect, etc. The point being, the longer and more complicated you make the transaction, the more opportunity for a screw-up to occur. Suddenly your “favor” looks less like a favor and more like a burden in the patient’s eyes. 

Why wouldn’t patients just opt to use their credit card? The key difference is that unlike credit cards whose balances can fluctuate and continue to accrue until being paid off, BNPL gives customers a predictable monthly payment. This concept seems to resonate with many GenZ’ers, in fact this report even found that among the BNPL users, 38% thought it may eventually replace their credit card usage altogether. Does BNPL make sense for your practice? Only you can answer that, but my thought is if you already accept credit cards, then why not offer this as well?

If your practice does any form of layaway, I believe that despite fees, BNPL offers too many advantages to ignore and should replace any layaway system you have.  Also, these solutions offer one more upside that I have yet to mention… that BNPL also creates opportunities for increasing your sales in ways that credit cards do not!