Why a customer’s experience with financing matters for merchants
Customers view financing as a part of the shopping experience in your store. Learn why the financing journey matters just as much as other steps in the sales process and how merchants can use it to drive loyalty, reduce returns, and boost sales.
Key takeaways
A poor financing experience reflects on your brand. When financing is confusing or disappointing, customers associate that frustration with your business, not necessarily the financing provider.
Negative financing moments can ripple across your reputation. Dissatisfied shoppers often share poor reviews or avoid future purchases altogether.
Inclusive financing builds customer confidence and loyalty. Offering payment solutions for all credit types helps support more shoppers.
Your team’s ability to guide financing matters. Well-trained sales associates can reduce customer stress and close more sales by clearly explaining available options.
The right financing partner can elevate your entire business. Snap Finance helps merchants stand out with inclusive payment options, fast decisions, and strong support from onboarding to funding.
As a retailer, you invest a lot of time and money into making the journey from browsing to buying as smooth as possible. You train your staff, select your inventory, and create an inviting customer experience. But what about the final step?
For many customers, securing financing is the make-or-break moment between getting what they need and walking away empty-handed. And for retailers, the financing customer experience can secure the sale and build loyalty, or send customers out the door for good.
A customer’s financing journey is more than just a transaction. Is the application simple or confusing? How long does it take to get a decision? Are alternative financing options available? Is the approval amount enough to cover what they need? Retailers looking to grow should treat financing as a direct extension of their brand, their experience, and their business.
Financing reflects directly on the merchant
When a customer uses financing in your store, they don't separate the financing provider from your business. Instead, they see financing as part of their experience with you. This means a customer's financing experience – good or bad – reflects directly on your business. Recent research from Snap Finance found that that more than half of consumers (54%) won’t return to a business after a bad financing experience.
A financing process gone wrong can erode trust, create dissatisfaction, and damage your reputation, leading customers to question your commitment to providing a seamless, customer-friendly experience. And that includes not offering alternative financing options for those with less-than-perfect credit.
Even though the financing service is technically provided by a third party, the negative perception is likely to stick with your business.
How does this negativity show up? Customers who feel frustrated by a confusing application or a sudden denial often share their thoughts online. You might see negative merchant reviews that have nothing to do with your products or staff, but everything to do with the financing partner you chose. They might complain about hidden fees, aggressive collection calls, or poor customer service from the lender. To the public, these complaints are tied to your store’s name.
A bad financing experience can also lead to more product returns. A customer who felt pressured or confused by their financing terms may regret their purchase. Once they get home and review the details, they might feel they made a mistake. This buyer's remorse can result in customers returning an item.
Finally, a poor financing process affects your team. Your sales associates are on the front lines. When a financing application is difficult, they are the ones who have to manage the customer's frustration – and theirs. Dealing with unhappy customers, technical glitches, and confusing processes takes time away from helping other shoppers and creating positive experiences. Ultimately, the financing you make available can improve or hurt your team's ability to build customer loyalty.
How financing can build customer trust and loyalty
For many shoppers, especially those with less-than-perfect credit, the financing process can be stressful. They may have been turned down before and are worried it will happen again.
Snap Finance found that 78% of those with credit scores below 670 have been turned down for financing.
Accessing credit is often difficult, which is why shoppers often depend on knowledgeable sales associates to guide them through their choices, including payment options. Recent research from Snap Finance found that among shoppers with lower credit scores, 20% rely on store associates to recommend the best financing for their situation.
Make sure your sales team is well-versed in available financing options, including those from Snap Finance, and can easily walk customers through the application process for each. When your team is confident, your customers will be, too.
The increasing need for low or subprime financing options
More than 47 million Americans are considered subprime borrowers – up 1.2 million in the last year. Although it can vary from lender to lender, a subprime borrower is generally defined as someone who has a FICO® score below 670 – and 29% of consumers have a FICO score below this threshold.
This is a significant segment of the population that is actively looking for ways to pay for essential products and services – and represents a hidden demand for financing options that your business could be tapping in to.
When you provide access to inclusive financing for all credit types, shoppers will remember how you helped them get what they needed. That positive experience will be directly linked to your store, strengthening customer loyalty and making customers more likely to return to you for more of what they need. And they’ll tell friends, family, and neighbors about the store that helped them get something they thought was out of reach.
How to choose the right financing partner for your business
With the right provider, inclusive financing, such as lease-to-own financing and loan options, can be a win for you and your customers. That’s why selecting the right one is critical.
Here are top considerations for businesses looking to add low or subprime financing for their customers.
Low or no fees for businesses
Small businesses are always looking for ways to reduce costs. That’s why financing partners who offer low or no fees are incredibly attractive. Snap Finance, for example, offers financing at no cost to businesses.
Prequalified leads and new traffic
Many financing providers offer prequalification for financing. Prequalification involves a basic review of a customer’s creditworthiness to determine if they’re likely to qualify for financing. Not only do customers have a better idea of how they’ll pay before they shop, but prequalification also streamlines the sales process for your business.
Small businesses are also looking for financing partners that help them drive new traffic sources. For example, Snap Finance uses social media, digital ads, search engine marketing, in-store signage, and more to promote the availability of pay-over-time options and encourage new and repeat business.
Quick settlement of funds
Businesses are paid by most financing companies when the customer receives their merchandise. The customer then makes regular payments to the financing provider until the account is paid in full. How quickly a business receives their money from the transaction happens is critical to cashflow and day-to-day operations. Snap Finance partners, for example, benefit from expedited funding, typically within 48 hours of completed transaction.
Marketing services
Marketing support, materials, and campaigns can help small businesses attract new customers and encourage repeat business.
Training and support
Effective onboarding, training, and ongoing support helps small businesses accurately explain third-party financing options and help customers through the application process. In addition, many providers, including Snap Finance, offer access to performance reports to help businesses measure the impact of financing on sales and customer satisfaction.
Experience the Snap Finance advantage
A generic, one-size-fits-all solution often creates friction, while a best-in-class partner like Snap Finance is designed to make the process seamless for both you and your customers. Discover the difference Snap can make for your business.
Easy application and quick decisions. Shoppers can apply in minutes, online or in-store, and get a decision in seconds
Quick onboarding. Outstanding bilingual support and seamless integration make it easy to get started with Snap.
Always-on marketing. Snap’s network of preapproved shoppers and our Store Locator mean more business for you.
Fast funding. Enjoy expedited payments, typically within two business days of merchandise delivery.
Increased revenue. Reach more customers and close more sales.
A poor financing experience can cost you sales, damage your reputation through negative merchant reviews, and decrease customer loyalty. But getting the experience right builds trust, encourages repeat business, and turns happy customers into vocal advocates for your store.
Partner with Snap Finance to turn your financing experience into one of your greatest strengths.
Interested in learning more? Check out these additional resources from Snap Finance:
Snap-branded product offering includes retail installment contracts, bank installment loans, and lease-to-own financing. For more detailed information, please visit snapfinance.com/legal/products.