While some people abhor the use of credit, fact is, the vast majority of people use it.

So why would a retailer not want to offer financing to consumers—especially when just about every dealer in the country already takes credit cards?

As I noted at the start, people generally look to use credit when making a large purchase and since flooring is still one of the largest purchases consumers will make for their home, the chances are pretty good they will want to put their new floor on some type of long-term credit.

Credit knows no class boundaries, meaning even the wealthiest people use it. In fact, the higher the ticket item, the chances are unless a person is planning to pay cash he will be looking to finance the purchase over a period of time. The wise person realizes why should they tie up their own money if some company is going to carry the note for a year or two or even three or four. This is the gamble the finance companies take as they realize many people will not pay off the purchase in time and will thus accrue interest charges. Regardless, the dealer gets paid up front, meaning even if the person ends up defaulting, the retailer still got his money.

For the consumer who knows they will pay off the purchase before the due date, they understand it will not only save them the interest fees it frees up their cash for other purchases since they will only have to lay out ‘x’ amount a month as opposed to one lump sum.

There is also some pretty good evidence to suggest that when a person is given the option to finance a purchase they might spend a little more than they would have without the credit offer.

Financing is also a way to attract customers to your store. Many people might want to buy new flooring but feel it is too expensive for them. If they see an offer that will allow them no interest for a few years they may decide it is now affordable to redo one or two rooms that badly need it.

So back to the question as to why a store wouldn’t want to use financing.

Some say it’s too much of a hassle as there’s too much paperwork or bookkeeping to keep track of while others will say they are already paying a certain percentage for the national credit cards and more times than not running a private financing offer costs them even more points—though retailers who are aligned with buying groups or in mill programs, not to mention the savvy businessperson will find ways to get their costs inline or even lower than what they pay per credit card swipe.

As a business, one would think anything that can attract new business is worth a little “hassle.” The same would also seem to be true regarding the cost objection. Even if a privately financed sale costs you 10 points over a national credit card, by generating just one job you will not only be making money you would never have seen, you also gained a customer who will most likely come back to your store when it comes time to do the next room in the house.