)% interest a con

Ianhn
Ianhn Posts: 1 Newbie
edited 28 January 2022 at 5:29AM in Praise, vent & warnings

Am I the only person who does not believe you ever get 0% interest when buying goods?

Up until lockdown if I was purchasing a large ticket item £2K -£3K that was advertised at 0% interest over 3 or 4 years I would always ask for a cash price and normally the shop would drop £500 -£ 700 off the price.

 That was until recently.

 I have been round nearly all the large furniture stores looking to change my sofa and chairs and in concert they are all refusing to give a cash price.

It is obvious that credit companies have set up  deals with shops that everything must be put through finance and they are no longer allowed to give cash reductions. Every shop said the same thing that they get their money if on the 0% credit so can no longer give discount for cash . I assume if you pay cash the shop benefit because the finance companies will not get their cut.

I am lucky that I can afford to pay for goods outright and most people are happy with the 0% payments of over the term but it is wrong that we are all being forced to go down the finance route as this is putting about 20% onto the cost of the goods we are all buying.

 Is there anyone else out there who also thinks this a con and any ideas what can be done to highlight what is happening

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Comments

  • Where is the con?

    You sign up for 0% intetest, and hey presto, you pay no interest.
  • Ianhn said:

    Am I the only person who does not believe you ever get 0% interest when buying goods?

    Up until lockdown if I was purchasing a large ticket item £2K -£3K that was advertised at 0% interest over 3 or 4 years I would always ask for a cash price and normally the shop would drop £500 -£ 700 off the price.

     That was until recently.

     I have been round nearly all the large furniture stores looking to change my sofa and chairs and in concert they are all refusing to give a cash price.

    It is obvious that credit companies have set up  deals with shops that everything must be put through finance and they are no longer allowed to give cash reductions. Every shop said the same thing that they get their money if on the 0% credit so can no longer give discount for cash . I assume if you pay cash the shop benefit because the finance companies will not get their cut.

    I am lucky that I can afford to pay for goods outright and most people are happy with the 0% payments of over the term but it is wrong that we are all being forced to go down the finance route as this is putting about 20% onto the cost of the goods we are all buying.

     Is there anyone else out there who also thinks this a con and any ideas what can be done to highlight what is happening


    I don't think there is any con here because the shop is allowed to set whatever prices they want and they will include their overheads in whatever price they are charging. The price of the item will include the shops electricty, water, staff wages, store rental, company taxes, the staff kitchen etc so the fact that they also include a cost of finance isn't exactly unfair as these are all costs shared out across the business, that's how business works to make money.

    But there is no way they are able to offer a £500 discount on a £2000 item just because you wern't taking the finance. It's more likely that before Covid19 shops had lower running costs so could offer a bigger discount, now due to supply chain issues and loss of income due to lockdowns they probably can't afford to offer the big discounts they did before so need to sell items at full price.


  • IvanOpinion
    IvanOpinion Posts: 22,137
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    One of the brexit benefits is that the cost of shipping has increased significantly.  One retailer was telling me that he used to be able to buy a container that could hold about 18 suites for £8000 but now he is paying double that.  I suppose they have to pass that onto the customer directly.

    There is no con - in fact by offering discount at the level you suggest I would suggest that it is the tax payer that is being conned, not you.
    Past caring about first world problems.
  • sheramber
    sheramber Posts: 18,622
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    The back log of lorries due to Brexit rules led to a scarcity of containers as they were stuck on the  backs of the lorries awaiting clearance.

    AS a result the  price of a container shot up- supply and demand.

     And like the increased price for the fuel shortage   that wasn't , the price doesn't come down again.
  • sheramber
    sheramber Posts: 18,622
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    Ianhn said:

    Am I the only person who does not believe you ever get 0% interest when buying goods?


    There is no such think as a free lunch. Someone has to pay for it.
  • zagfles
    zagfles Posts: 20,197
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    One of the brexit benefits is that the cost of shipping has increased significantly.  One retailer was telling me that he used to be able to buy a container that could hold about 18 suites for £8000 but now he is paying double that.  I suppose they have to pass that onto the customer directly.

    There is no con - in fact by offering discount at the level you suggest I would suggest that it is the tax payer that is being conned, not you.
    If you're implying large furniture stores are evading VAT by offering cash discounts I very much doubt that is true. If they offer discounts it's likely to be just because they have the margin to do so with people who bother to negotiate. Also I doubt OP literally means "cash", probably just not on finance.

  • zagfles
    zagfles Posts: 20,197
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    Ianhn said:

    Am I the only person who does not believe you ever get 0% interest when buying goods?

    Up until lockdown if I was purchasing a large ticket item £2K -£3K that was advertised at 0% interest over 3 or 4 years I would always ask for a cash price and normally the shop would drop £500 -£ 700 off the price.

     That was until recently.

     I have been round nearly all the large furniture stores looking to change my sofa and chairs and in concert they are all refusing to give a cash price.

    It is obvious that credit companies have set up  deals with shops that everything must be put through finance and they are no longer allowed to give cash reductions. Every shop said the same thing that they get their money if on the 0% credit so can no longer give discount for cash . I assume if you pay cash the shop benefit because the finance companies will not get their cut.

    I am lucky that I can afford to pay for goods outright and most people are happy with the 0% payments of over the term but it is wrong that we are all being forced to go down the finance route as this is putting about 20% onto the cost of the goods we are all buying.

     Is there anyone else out there who also thinks this a con and any ideas what can be done to highlight what is happening

    It's more likely to be down to the potential to be seen as false advertising, if they offer 0% finance but a discount for cash then it's not really 0% finance, as you pay more for the product if you take out finance.

  • I suspect zagfles is closest to the truth. It's not 0% if you give your customers a discount for not using it. If you want to pay cash and get a discount for doing so, there are a lot of small companies who will be more than happy to deal with you. Many of them will even provide a VAT receipt! Companies still pay the finance company or card processing company various fees, and there's reduced risk with accepting cash payment as the customer can't later issue a chargeback or section 75 etc. Plus the retailer gets paid right away, whereas with finance payments the money is usually only released a set period of time after the customer has had the product delivered.
    I'd never deal with a company that specifically asked for cash payment, but my business and many others will give a discount for paying with cash. Although probably not as much as 20% unless they're collecting the product themselves.
  • I suspect zagfles is closest to the truth. It's not 0% if you give your customers a discount for not using it. If you want to pay cash and get a discount for doing so, there are a lot of small companies who will be more than happy to deal with you. Many of them will even provide a VAT receipt! Companies still pay the finance company or card processing company various fees, and there's reduced risk with accepting cash payment as the customer can't later issue a chargeback or section 75 etc. Plus the retailer gets paid right away, whereas with finance payments the money is usually only released a set period of time after the customer has had the product delivered.
    I'd never deal with a company that specifically asked for cash payment, but my business and many others will give a discount for paying with cash. Although probably not as much as 20% unless they're collecting the product themselves.

    Your business and others that do that are breaking the law as the Consumer Rights (Payment Surcharges) Regulations 2012 make it illegal to charge less for cash and charge more for other payment types.

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