A survey conducted by the point-of-sale financing platform, ChargeAfter, has found that only 12% of merchants achieve consumer financing approval rates of 80% or above. Additionally, 29% of retailers report that their consumer financing approval rates are less than 60%. This means that for almost one-third of retailers, at least 40% of their customers walk away with a poor experience, and that businesses are at risk of losing significant revenue. 

At the same time, 75% of merchants expect consumer demand for financing to grow in 2023. This leaps to 100% of merchants with an average order value of less than $500,  indicating that demand for financing is on the rise for lower-ticket items. 

High approval rates not only help merchants grow their businesses but also improve customer satisfaction, and increase the likelihood of repeat business. Merchants that don’t improve their practices to achieve higher approval rates are at risk of losing out to the competition. 

The survey further highlights that consumer financing is becoming an integral part of the customer experience, with 66% of retailers prioritizing implementing a consumer financing platform in 2023.  Although 84% of merchants currently offer their customers a prime offer at the point of sale, only 17% offer a tertiary lending option. By implementing a consumer financing platform, retailers can provide a financing solution for all of their customers. 

"Our survey indicates that most merchants are missing out on a significant opportunity to increase sales and improve customer satisfaction,” said Einat Etzioni, Executive Vice President of Marketing at ChargeAfter. “Merchants who are able to provide their customers with access to a choice of financing products from multiple lenders that cover the entire credit spectrum, are more likely to meet consumer demand for point-of-sale financing, increase sales, and build long-term customer relationships. A platform also offers the easiest way for retailers to handle the complex financing cycle, including disputes, refunds, and reconciliations.”

About the Survey: The survey was conducted by ChargeAfter to benchmark how retail executives regard the state of consumer financing. The survey explores how well merchants are currently meeting their customers’ demand for financing at the point of sale, how they believe consumer demand for financing will change in 2023, and their financing priorities. Download the report here.