LayBy opportunity for local small business retailers as the federal government is set to regulate buy now pay later

With the federal government set to announce today plans to regulate buy now pay later (BNPL) products under the Credit Act, it could be timely for local independent retailers to pitch LayBy.

The use of LayBy dropped away as BNPL like Afterpay, Zip and others offered shoppers easy access to finance for immediate purchases. While BNPL is used for many products outside the scope of LayBy, I expect the use of LayBy to increase once the BNPL regulations are in place.

While the ACCC defines the LayBy arrangement, LayBy is regulated at the state / territory level. In Victoria, for example, the regulations cover the contract, cancellation, price chan get and more. The level of regulation varies between the states / territories.

In physical stores, the use of BNPL varies by retail channel, but it is a popular payment method, but often expensive to the retailer. Whereas credit card payments today typically cost retailers less than 1%, BNPL payment can cost as much as 6%. The benefit to the retailer is that there is no risk should the shopper default.

The anticipated BNPL regulatory changes give local retailers the opportunity to re-pitch LayBy. But first, we need to ensure our processes are fit for purpose, smooth, understandable, appealing to shoppers and economically viable for us. This is where retail management software like that from us here at Tower Systems comes into play.

Our POS software offers easy and consistent:

• Structuring of terms and conditions.
• Managing the appropriate deposit.
• Setting of different expiry terms for a LayBy based on the products in the LayBy.
• Tracking payments made by customers.
• Following up any payments that are missed based on the agreed payment schedule.
• Tracking where LayBy products are stored.
• Easy editing of a layBy once commenced – by adding and removing stock.
• Managing partial collection of items in the LayBy.

This structure is loved by many retailers using the LayBy facilities in our POS software. Some of our customers do thousands of LayBys each year.

Our advice to retailers is to focus on the expectation that all LayBys will be fully paid and collected on time, to consider LayBy as a positive service by the business and opportunity for the customer. Promote it. Welcome its use. Make managing it easy for you and the shopper.

Local retailers can make decisions around offering LayBy that could differentiate their businesses from bigger retailers.

We help our POS software customers with LayBy setup training and advice, so they can offer this payment method in a way that’s backed by consistency and certainty, offering a service that could help them win more shoppers.