Pay in 2 or 3 installments free of charge, a payment method spreading online and attracting more and more people. Question: do these payment facilities allow more responsible purchases – because they are more expensive – or on the contrary, do they fuel our overconsumption of clothing?
Klarna, Alma, Pledge, or Oney… behind these somewhat enigmatic names hide payment solutions in installments.
The principle is simple: you usually spread your payments over two or three months at no additional cost. If this pretty coat at 300€ catches your eye, you can pay 100€ each month for three months while receiving your piece from the first payment.
Do you dream of being undermined like Rihanna, but it’s too expensive for you? Just pay a small amount now, and the garment is yours. Hyper hard not to crack.
“These are credit solutions even if they are not recognized as such,” immediately warns Matthieu Robin, deputy head of studies at UFC-Que Choisir.
According to the legislation, these credits of a duration not exceeding 3 months, free or accompanied by interest or costs of a “negligible” amount, are not subject to the provisions applicable to credit on the consumption.
“This practice can be dangerous, continues the specialist, because there is no check on the solvency of consumers.”
Build a sustainable wardrobe with payment in installments
However, despite the risk of indebtedness – in France, one in ten people would not repay a split cost on time – these mini-loans appeal to both brands and consumers.
“I have already used this service to buy ethical clothes, which are necessarily more expensive than fast-fashion ones. This allows me to spread out the payments and to respect my monthly budget”, confides Oumou.
The same goes for Nicole, who took advantage of it this summer to “build a sustainable dressing room,” or Manon, for whom split payment offers the possibility of “investing in responsible pieces.”
For others, it even makes it possible not to buy too much: “by paying in installments, each month I have a reminder that tells me that I already bought a part one or two months ago and that therefore I don’t need a new piece of clothing,” explains Charline.
One thing is sure; these solutions are a hit in France. According to the OpinionWay – FLOA barometer, dating from June 2021, “nearly 1 in 3 French people have used payments in several installments over the past 12 months (compared to 1 in 4 according to the June 2020 barometer)”.
A craze confirmed by the Swedish fintech Klarna. “Since our launch in France in June 2021, more than 2 million French consumers have used our services at least once,” rejoices Eric Petitfils, France Director of the company.
And to continue, “Although the average age of users is 32 years old, the age category with the strongest growth is that of Baby Boomers (over 57 years old), confirming the growing interest in payment alternatives across all generations”.
When asked if these solutions would encourage more ethical clothing purchases, Eric Petitfils was firm: “Flexible payment solutions, such as free 3 installments, allow consumers to choose brands that align with their values and Our October 2022 edition of Split Payments More Conveniently in Shopping Pulse research shows that 40% of French say it is important to them that brands and retailers take sustainable action.
Split payment, cause of over-indebtedness and over-consumption
However, only some agree with this. “Beyond the individual risks of over-indebtedness, there is a collective risk: at a time when the ecological emergency forces us to produce less, [payments in installments] push us, on the contrary, to consume always more… and therefore to pollute even more,” writes Loom.
Because once this system is used and mastered, consumers are tempted to repeat the experience.
According to the OpinionWay – FLOA barometer, 79% of respondents say they plan to pay again in installments in the coming months, 2 points more than in 2019, and 76% would even be ready to change their sign to be able to pay in installments.
“I think it pushes consumption. We are not talking about credit, but about payments in installments, the words are well chosen not to scare off consumers, so it’s more tempting,” says Olivier Gayraud, a lawyer at the CLCV (Consumer Housing and Living Environment).
“I have already wondered about the ethics of this solution, admits Katia Sanchez. On the other hand, my clients often thank me for offering them the possibility of paying in three installments because it makes the sweater more accessible. Ethical clothing costs more”.
A criterion also cited by Anne Montecer, the founder of the Les Sublimes brand. “Our mission is to make ethical fashion more accessible, so we have to offer additional services, such as split payment, especially in this declining purchasing power.”
And then, despite costs of a few euros per order for the brands, these solutions represent a significant part of sales: 50% for Katia Sanchez or 15% on average for Les Sublimes.