Rooms To Go runs one last no-no-no sale before law bans them
By Clint Engel -- Furniture Today, February 22, 2010
SEFFNER, Fla. —
Earlier this month, Room To Go ran its last no-interest, no-payment, no-down-payment promotion.
Actually, it was a quadruple no (including no minimum purchase), but the key pitch was that consumers wouldn't have to make payments on their purchases and they were interest-free until January 2012.
But they had to hurry. The offer was good through President's Day. After that, as the chain noted in its television spots, the U.S. Treasury was putting a stop to such offers.
In September, the U.S. Treasury's Office of Thrift Supervision gave companies until Feb. 22 to be in compliance with the new rule, which in part bars no-payment offers.
Whether such promotions will be missed by consumers and retailers remains to be seen.
“I honestly don't think it's a big problem,” said Rooms To Go CEO Jeff Seaman. “I think they'll miss it, but they'll be fine with the new laws.”
Seaman isn't sure what credit promotions will look like for RTG in the future. He imagines they will be similar, but with required monthly payments. He did say this last no-no-no did “very well,” in part because it was such a long-term offer — deferring payments for nearly two years.
Whether this will be good for consumer also is a matter of opinion, he added. Seaman said he understands how the new policy could protect consumers from getting too deep in debt, but said shoppers “really like no payments.”
“If anything, it will probably help the credit companies, because collections will be more consistent and more predictable,” and they will be better able to manager their risk, he said.
Tommy Miskelly, partner in Jackson, Miss.-based Miskelly Furniture said the loss of no-payment offers won't be a big deal for his stores because “we didn't use those crazy interest formulas much.”
“I never thought it was a great idea for consumers, anyway,” he said. “All it does is kind of defer their pain a little bit.… I think (the change) puts the consumer back in the market in a better position long-term.”
St. Louis-area Mueller Furniture isn't expecting much of an impact either.
“To be honest, it seems most of our customers wanted to have some sort of monthly payment,” said Marketing Director Mark Mueller, adding that he expects it may hurt retailers with lower average tickets — $499 or less — than Mueller.
“We offered (no payment) on several occasions, but it never seemed to be that big of a draw.”
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Rooms To Go runs one last no-no-no sale
Feb 23, 2010
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