When customers shop for a replacement water heater or a new washer and dryer, they’re not just making purchases, they’re investing in necessities for their homes. These essential big-ticket items can be expensive, making it challenging for everyday American households to afford them. Consumers with less-than-prime credit history may have an especially difficult time making such purchases.
In today’s competitive retail landscape, the difference between stagnant performance and sustainable growth comes down to capturing opportunities your competitors miss.
For major retailers selling essential high-ticket items like appliances and home improvement services, a significant growth lever is retail financing. Retail finance solutions- particularly second look financing- provide retailers the opportunity to meet customers where they’re at and complete more transactions.
The Case for Retail Financing
Every day, qualified consumers walk out of retail stores empty-handed. Not because they don’t want to make a purchase, but because they lack access to financing options. Approximately 100 million U.S. consumers have credit scores below 700.1 This substantial market segment represents an enormous revenue opportunity for many retailers.
Consider this scenario: A homeowner has a service contractor visit their home because a significant plumbing leak has developed, causing water damage to their bathroom floor and walls. They’ve selected necessary plumbing replacements totaling $6,800 to prevent further damage and maintain proper functioning. When they apply for your primary financing option, they’re declined despite having stable employment and income.
Frustrated and embarrassed, they are unable to move forward with the repair, potentially turning to a competitor with more flexible retail financing options. Without a second look financing solution in place, you’ve lost not just this substantial sale, but potentially years of future business. Multiply this by hundreds of similar scenarios each year, and the impact on your bottom line becomes significant.
The Second Look Financing Advantage
While retail financing options are designed to increase sales and payment flexibility, second look financing is specifically designed for consumers who do not qualify for primary lender offers due to less-than-prime credit profiles.
For retailers focused on driving sustainable growth, second look financing delivers measurable results across key performance indicators, including:
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Immediate Revenue Capture
Retailers and service providers implementing comprehensive financing strategies have documented:
- Higher conversion rates due to customers gaining access to more flexible retail financing options
- Average ticket size growth of up to 30%2 when appropriate financing options expand purchasing power
- Significant reduction in abandoned transactions, especially for eCommerce businesses
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Enhanced Competitive Positioning
In markets where product differentiation is increasingly challenging, the retail finance experience creates a meaningful competitive advantage. Retailers who offer more inclusive financing options differentiate themselves from competitors who don’t.
Consumers with less-than-perfect credit often face stigma or embarrassment during the checkout process, but by providing an alternative path to financing, you position your business as inclusive and empathetic.
Additionally, more flexible retail financing options provide a seamless purchase experience by eliminating the need for multiple applications or waiting several days to hear back on an approval decision.
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Long-Term Customer Value
Perhaps most significantly, second look retail financing can transform one-time buyers into loyal customers. If your business offers a flexible financing option that works for them, you can guess which store they’ll be coming back to for future purchases.
While traditional retail lenders focus on consumers with strong credit profiles, those with a less-than-prime history are often left without a solution. Second look financing addresses this gap. It’s a smart, compliant, and inclusive way to extend credit access to underserved populations, allowing businesses to increase sales while also building customer goodwill.
Retail Finance Solutions: The Fortiva Retail Credit Difference
Implementing a second look program requires balancing customer experience, operational efficiency, and financial performance. As a leading second look finance provider, Fortiva Retail Credit’s streamlined platform provides a great experience for both merchants and consumers.
Seamless Omnichannel Implementation
Today’s shoppers expect a consistent purchasing experience from your brand regardless of the channel they’re using. Our technology solutions easily integrate with your existing system to deliver:
- A unified application workflow that automatically evaluates declined customers for second look options
- Quick decision capabilities that maintain sales momentum at critical conversion points
- Solutions that work equally effectively in-store, online, or via mobile shopping
Customized Solutions for Your Business Model
Different retail environments require different financing approaches. Fortiva Retail Credit offers three financing solutions that can be tailored to your specific needs:
- Installment loans
- Private label credit cards
- Cobranded credit cards
Each product serves a unique role in helping you drive revenue, increase customer retention, and expand your reach.
Installment Loans
Installment loans are a closed-end debt that is repaid by the borrower with equal payments over a set period of time. This product is ideal for businesses with high-ticket items or services where affordability might otherwise be a barrier.
How it works: When customers initiate a purchase, they’re offered financing as a payment option. If the prime lender declines the application, our technology-enabled platform seamlessly delivers a credit decision within seconds, so there is no awkward wait time or confusion.
For consumers with limited credit history, point-of-sale financing can provide a bridge to ownership with more favorable terms than many alternative options. Our financing offers loans with long-term loan terms, opening the door to many more potential customers.
Private Label Credit Cards
Private label credit cards are store-branded cards that consumers can use with your business. These programs create a closed-loop ecosystem that rewards loyalty and repeat purchases.
How it works: Customers apply for your store-branded card and receive special financing offers, exclusive discounts, or early access to promotions.
Private label cards offer a stepping stone for consumers who have been denied traditional cards. Because card usage is limited to your store, it encourages responsible spending while opening access to promotional offers.
Private label cardholders are more likely to return to your business when they need their next purchase and also tend to feel a deeper connection to your brand, simply by carrying your card in their wallet.
Cobranded Credit Cards
Cobranded credit cards are jointly offered by your business and Fortiva Retail Credit. These cards can be used anywhere major credit cards are accepted, but they may provide an opportunity to earn rewards and incentives when used for purchases.
How it works: Consumers receive a traditional credit card that carries your branding alongside a credit card network (Visa, Mastercard).
With a cobranded card, consumers gain access to a revolving credit line for qualifying purchases and the ability to earn rewards. These cards appeal to frequent shoppers who want flexibility and perks.
Enhance Your Retail Financing Solutions with Fortiva Retail Credit
As consumer payment preferences continue to evolve, comprehensive financing strategies are becoming table stakes for competitive retailers. Second look financing represents a strategic growth lever with the potential to deliver immediate revenue impact while building long-term customer relationships.
By implementing this approach, retailers can turn lost opportunities into revenue streams, creating a sustainable competitive advantage through financial inclusivity and a superior customer experience.
At Fortiva Retail Credit, we make it simple. Start by telling us about your business and customers and our experts will tailor a solution to meet your specific needs.