Lease-To-Own Services Make A Comeback With Overstock.com

Lease-to-own services are making a comeback with eCommerce retailers. Overstock.com is bringing a lease-to-own purchase option to its financial service offerings. The option, provided by Progressive Leasing, allows customers to lease products for as long as a year and is available for over three million products on the retailer’s website.

Overstock.com is no stranger to offering financial services — it already provides credit cards, lending, investments and insurance services to its customers. In an announcement, Overstock.com founder and CEO Patrick M. Byrne said, “[The] lease-to-own program will help our customers build the homes of their dreams in a way that is financially convenient for them.”

Customers can apply for the service on Overstock.com, which claims that “no credit is needed,” and after putting in an application, customers receive an instant decision. If approved, the customer’s eCommerce checkout process works as it would for other payment methods: the customer chooses Progressive as their payment method and Overstock.com ships the order following an initial payment of $49.

After receiving their orders, customers can own the item by paying a “90-day purchase option, an early lease buyout, or by completing 12 months of payments,” according to the company. Byrne said that the company focuses on “making the shopping experience as convenient as possible in all areas, including the final checkout.” To that end, the company provides financing, PayPal payments and even allows customers to use digital currency.

Progressive Leasing, a division of Aaron’s Inc., is one of the largest players in the lease-to-own industry. According to a January press release, the firm provides lease purchase services at more than 22,000 retail outlets. Also in January, Progressive Leasing and Marqeta, announced a technology partnership that aimed to enhance the checkout process for leasing customers.

With the tie-up, Marqeta enabled Progressive Leasing to take advantage of a wide range of modern features, including virtual card issuance, tokenization and its patent-pending Just-in-Time (JIT) Funding, allowing the firm to authorize and reconcile transactions in real time. Marqeta is a card issuing and core processing platform, powering prepaid, debit and credit cards for commerce firms.

Modern Takes On Lease-To-Own

Overstock is not the only retailer to take the lease-to-own concept and apply it to eCommerce. In May , Sears Holdings announced that it had expanded its leasing program to allow customers to finance a variety of products, both in-store and online. The retail chain originally launched a program called LEASE IT in 2012, aimed at providing an affordable solution to those who do not have credit or cannot benefit from layaway because they need the product immediately.

Since its debut, LEASE IT has processed over one million leases, which prompted Sears to offer it on a grander scale. The company wrote in a blog post, “To build on this success, we are now making it easier to lease products not just in-store, but across our digital channels, including Sears.com, Kmart.com, the Sears and Kmart apps and our Puerto Rico sites, Sears.com/pr and Kmart.com/pr.”

Through the offering, members can lease hundreds of thousands of items fulfilled by Sears or Kmart in categories such as appliances, lawn and garden, sporting goods, mattresses, electronics, tools and jewelry. Customers can lease these products, and include services such as home delivery, installation and protection agreements in one lease.

In addition, Sears offers an online estimator tool to help members estimate their payment with different payment schedules and lease amounts. The standard lease term is as short as five months, with an early purchase option at 30, 60 or 90 days (not available in New Jersey, Vermont, Wisconsin or West Virginia). After the five-month minimum lease term, customers can continue to lease at the same payment amount and schedule, buy out their lease or return the item.

To ease the approval process, a credit check is not required, and the program offers weekly, bi-weekly or monthly payments based on the customer’s pay cycle. Lease payments can be automatically deducted from a member’s bank account or credit card. Sears said the offering is another example of “how [Sears is] continually innovating to make online shopping easy for [its] members,” showing that lease-to-own can be a successful part of a retailer’s eCommerce payment strategy.