''Critics say the industry has taken advantage of vulnerable customers for years by making rental payments so high that a product's ultimate purchase price is exorbitant.''
Rent-to-own stores lease electronics, appliances and other household items by the week or month. Payments can be applied toward a purchase. Critics say the industry has taken advantage of vulnerable customers for years by making rental payments so high that a product's ultimate purchase price is exorbitant.
But industry officials say just 5% of their customers end up buying their products; customers are simply looking for short-term solutions when critical appliances go kaput.
Aaron's recent growth is almost unheard of in this economy. On Thursday, retailers announced monthly sales declines almost uniformly. Most retailers are either closing stores or cutting back on new-store plans.
The ability to get a new refrigerator for less than $18 a week is a benefit that shouldn't be minimized, Rent-A-Center's Dwight Dumler says. Besides, he says, "If they buy a used refrigerator at a garage sale three weeks later, they can end the rental with no further obligation."
About 75% of Rent-A-Center's customers return the merchandise they rented within 17 weeks.
Tighter credit and concerns about job losses make many consumers leery about buying or financing appliances or furniture, Tanner says. Renting, he says, seems less risky.