The ghosts and goblins this past week aren’t the only scary things that have been around. Employees struggling to purchase a new computer, television or home appliance when the economy is weak and times are tough can also be frightening.
Retailers held the monopoly on buying programs initially, giving consumers the options to purchase products with cash, credit card and flexible financing options. However, when money got tight for consumers, credit scores plummeted, and financial-lending options all but dried up, retailers struggled to incent individuals to make these purchases. Manufacturers tried to get into the game by offering corporate discount computer programs, but these exposed employers to unwanted liability.
Consumers also turned to rent-to-own programs as a means to acquire everything from furniture and major appliances, to electronics and computers. However, for the credit-challenged consumer living paycheck to paycheck, this is not a viable option.
According to a June 13, 2011 article in The Fresno Bee, “rent-to-own stores offer a powerful temptation for people who want new furniture or the latest TV but can’t afford them – but beware the price of impatience: sticker prices for merchandise at rent-to-own stores are often much more than at regular retail outlets – and the costs can climb even higher for a long-term rental.”
This summer, the U.S. House Committee on Financial Services, Subcommittee on Financial Institutions and Consumer Credit, held a hearing on the rent-to-own industry to examine rental purchase agreements and the potential need for federal regulation of the industry to protect consumers. Regardless of the outcome of potential future federal regulation, the committee strives to ensure that consumers have access to different options when choosing the best way to obtain goods and services.
Through employee purchase programs, companies can now offer their workers a financially responsible alternative to buy new name-brand products such as computers, appliances, furniture and electronics. Offered as a non-traditional voluntary benefit, employee purchase programs allow eligible workers to use payroll deduction to make manageable payments during the course of just months.