Ahead of the 2021 holiday season, one of the programs most cherished by consumers during these dates, Walmart’s layaway system has fallen into oblivion. The large U.S. retailer now offers, instead, Affirm’s “Buy now, pay later” service.
Affirm, a leading company in the Buy Now, Pay Later (BNPL) sector, has partnered with Walmart since 2019, but it is only now that it replaces the retailer’s layaway system. The change aims to allow consumers to take the items home immediately, paying for them with Affirm, unlike keeping the products from late August to mid-December while customers make deposits and pay in full.
But one of the advantages of the layaway system, and which can no longer be enjoyed, was that no interest was charged for reserving the product until it could be paid in full. On the other hand, although Affirm has no hidden fees or charges for late payments when using its services, customers can face an annual percentage rate (APR) of 10% to 30% on purchases, depending on their credit, and 0% APR for selected promotional items on Walmart.com.
Additionally, not all Walmart customers may be eligible for Affirm loans, as eligibility depends on their prequalification status.
The BNPL service can be used for purchases ranging from $144 to $2,000. Items such as alcohol, groceries and foods, personal care products, and pet supplies are excluded.
“We have learned a lot over the past year as the needs and buying habits of our customers have evolved,” said a Walmart spokesperson in an interview with Business Insider. “We are confident that our payment options provide the right solutions for our customers.”
Since 2020, Walmart has been gradually phasing out its in-store layaway system, offering it only for select jewelry items.
POS loans, known as “Buy Now, Pay Later,” work like a line of credit by letting you pay for an item in installments, regardless of its value. When you use this payment method for online purchases, Affirm settles the payment so the item can be shipped to you, while you pay over time. Its popularity surged during the pandemic, as many unemployed or low-income individuals ended up buying groceries and household essentials this way. A recent Morning Consult study found that 17% of adults in the United States used a loan of this kind during June.
Although Buy Now, Pay Later was already being rolled out at Walmart, it will now completely replace the layaway system. Walmart customers will be able to return any purchase made with Affirm to receive a refund, however the portion paid as interest will not be refunded.
Likewise, partial or late payments can affect the consumer’s credit score or their ability to obtain new loans with the company, according to Affirm.
Walmart has recently undergone significant changes, especially to bolster consumer confidence in online shopping via Walmart.com, including its Walmar+. A few days ago, the company announced its “Built for Better” program, aimed at helping customers find products more friendly to health and the environment.
On social media, some shoppers have already expressed concern about how they will be able to do their Christmas shopping if they cannot qualify for Affirm loans.
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