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Need a Consumer Financing Program?

June 26, 2012
In these tough economic times, we retailers need to do anything we can to improve sales. One way to do this is to offer customers an easy way to pay for their new furniture. And there is no easier way than to postpone payment a long period of time without having to pay interest. To do this, we have to find a company willing to finance our consumers. Here’s how I did that.

Several years ago, when CFR was still around, we partnered with CitiFinancial to offer a consumer financing plan to members. This was during the “boom” times and CitiFinancial was so anxious for business that they actually paid participating retailers 1% of the gross transaction. That’s right, instead of the retailer paying a discount fee like we pay to credit card processors, CitiFinancial paid us money. What was not to like about that?

Over time, the amount they paid us was reduced until, finally, we were paying them a discount fee of 1%. Still this was much less than the discount fee for any credit card we accepted. In early 2011, CitiFinancial’s consumer financing plan was taken over by GECapital and the banking reform act went into effect. It was a perfect confluence of circumstances which allowed GECapital CitiFinancial to almost double the discount fee we were paying. Me, I started looking around for another resource.

The company I finally decided upon gave us a discount rate of slightly less than 1.7%. Even though that was higher than what we were used to paying to CitiFinancial, it was still lower than our base credit card discount rate. Unfortunately, the company we chose had higher qualification standards than CitiFinancial and our “turn down” rate went way up. All-in-all, it became a very unsatisfactory arrangement.

At this point, my story changes from consumer financing to the benefits of an ICFA membership. When I first started looked for a new consumer financing company to use, I called the ICFA to see if they had a program as one of their member benefits. Unfortunately, there was no program in place at the time. Joe Logan, the executive director of ICFA, did see the value of such a program and promised the organization would look into it.

It took time, but, lo and behold, on June 1 of this year, ICFA added just such a program to, what is becoming, a long list of member benefits. Here’s how it works. ICFA partnered with The National Home Furnishing Association because they had a program going with GECapital for their members. The discounts rates they had negotiated were exceptionally low. No any ICFA member can take advantage of these low rates. NHFA charges our members a $95 annual fee to participate in their GECapital program. This fee covers administrative and set-up costs.

When I reviewed the discount rates NHFA got, I was astounded at much better they were than what I was paying.The discount rate for their “6 months no interest plan” is only 1.20% instead of the 1.7% I was paying to another company or the 2.99% GECapital wanted to charge me when they took over CitiFinancial. In addition, I don’t need a specialized terminal to run applications or other forms. Instead,everything is run through the Internet. It takes about two minutes to enter an application and less than 90 seconds to get an approval. Any and all forms the customer needs to sign are created over the Internet, too. GECaptial direct deposits the funds into the bank account of your choosing within 3 days.

By transferring to GECapital from the company I was using, I figure I am going to save almost $500 in discount costs. And, if I convert 25% of my credit card invoices to this program, I can save another $2,000. Finally, I know I am going to get some sales I would have lost without the program. In fact, the first day we started using this program, we had a customer who was looking at $8,000 of furniture. They were reluctant to close the sale because of the cost until we told them about our extended payment plan. All of these savings are way more than an ICFA membership and the $95 participation fee. If you look in the dictionary under “no-brainer,” this program is be the definition!

Want to participate? Here’s what you do.
Step one: If you aren’t a member of ICFA, become one now; otherwise this program is not available to you.
Step two: contact Rhonda Craven at ICFA by phone at: 336.884.5400, by FAX at: 33.884.5303, or by email at: and tell her to send you an application.
Step three: Once Rhonda processes your application, you will be contacted by a representative from GECapital who will send you a new membership package.
Step four: Put up a banner announcing your new consumer financing plan.
Step five: Start making money.

ICFA  has stepped up its game for retailers. What used to be an association strictly limited to manufacturers has become a big tent for retailers, reps, and manufacturers. If you aren’t interested in their Consumer Financing Program, you might like their Sales Training Certificate program, or monthly webinars about current developments in the industry, or their Mystery Shopping Program, or their freight discount program. Using any of these programs will save more than the annual cost of membership. If it sounds like I am sold on being a member of ICFA, you can bet your sweet bippy I am.

Yours in confused retailing, Bruce