5 ms·

> Part of me is disgusted that this business is allowed to operate in this manner. I understand this sentiment, but it's risk mitigation. As the article point

by nkozyra 12y ago

> Part of me is disgusted that this business is allowed to operate in this manner. I understand this sentiment, but it's risk mitigation. As the article points out, there are no options for these people outside of this. It's serving a market and it's doing so in a way that reduces the risk - in some ways for both parties. Is it a smart move on the part of customers? I think it's hard to argue that it is, but I don't know that it's necessarily the fault of these businesses. If anything, it's a better move than going to an Amscot or getting a subprime credit card, because you're not wrecked financially nor is your credit ruined necessarily.

bluedino 12y ago
>> As the article points out, there are no options for these people outside of this. Going without a 60" TV or iPad isn't an option?
- plorg 12y ago
  The TV, no, but it is entirely possible that the iPad is being used for internet access. At this point in time a person without internet access is at a serious disadvantage to the larger population.
  - S4M 12y ago
    How about buying second hand computers or laptops?
    - JetSpiegel 12y ago
      The amount of computers just thrown away should be enough.
  - tgb 12y ago
    It would take about 11 weeks of payments to save up for the ipad to get one from eBay instead ($230 on ebay for 2nd gen 32gb model, 19 dollars a month for 72 weeks from buddy's). I wouldn't want to do without the internet for that long, but if they cancelled their internet for a month (which they wouldn't need without the ipad in this hypothetical) they'd be able to buy in maybe 2 months. Is two months of having to use the internet from the library really worth spending $1000 on when you can't even afford a $230 ipad? Sorry, but there are other options.
  - notahacker 12y ago
    What proportion of Buddy's customers need home internet access via a second hand iPad2 immediately (ultimate cost $1400) as opposed to internet access via second-hand Android tablet (cost <$100) after waiting a month? I'd be surprised if it was double digits.
- arenaninja 12y ago
  I'm with you on TV, not so much on the iPad (or other device that lets you access the internet). I don't own either, but I do own a desktop. Homework with an e-mail component is increasingly onerous, my niece gets it all the time, but she has no internet access at home (in Los Angeles), save for her phone. At best anecdotal evidence, but it does make me empathize with people who suddenly find themselves in need of an expensive piece of electronic equipment to be able to function in modern society. You might (rightly) point out that there are alternatives for the iPad, but how many people are really aware of them? A lot of people don't even call a tablet 'tablet', they call it an 'iPad'
- cookiecaper 12y ago
  Those aren't the only things that people rent to own. Most people rent basic household furnishings like couches, mattresses, and tables. Aaron's et al will offer other things to try to upsell you, like iPads, but that doesn't mean the entire sector is egregious. I believe there is a place for businesses like these. They're making an offer for important things, while possibly not quite absolute necessities definitely very useful "luxuries", to a group of people that would otherwise not be able to have them. No one else is willing to touch the prospective borrower in this situation because they are massively high risk. If you're in that position, you have to accept that people are going to want to be compensated for their exposure. If the only way to get a couch was to buy it over again each year for four years, would you do it? Remember, it's your only reasonable option to actually get a couch that you don't pull directly out of the landfill. Some people may go without a couch and be fine, but I don't think it's unreasonable to RTO a couch or a bed if it's your only option to get a decent furnishing.
  - knowaveragejoe 12y ago
    > it's your only reasonable option to actually get a couch that you don't pull directly out of the landfill. Except that isn't even remotely true.
    - cookiecaper 12y ago
      I think it can be remotely true. You could say they could go to a garage sale, and they may find something acceptable at a reasonable price, but what if they don't have a vehicle large enough to transport it or people to help load and unload it? Most RTO places offer delivery, and most garage sales don't. It's more or less the same case with Craigslist; while your chances of finding someone willing to make delivery may increase, you only have a crappy photo taken with a potato to try to decide if you want it or not. Compare to buying a couch like a normal person at a normal furniture retailer. If you have the income to sustain the payments and know that you'll be paying more in the long run, it's a tradeoff some people are willing to make. Most of the time, you can pay off rentals early. The same kind of shenanigans go on with any financial instrument when one is considered "high risk". Credit cards charge ~30% APR until you have a well-established credit history. Car loans cost 15-20%. In any of these cases, you're a fool if you let the full term run out at those rates. You could say that someone doesn't need a car to get by, but it sure helps a lot, and so does a decent bed if someone is trying to get a good night's rest and be functional for work the next day. RTO does serve a legitimate purpose. It's just expensive, but sometimes that tradeoff can be reasonable.
- ufmace 12y ago
  I may often not be super-sympathetic to the disadvantaged, but I can definitely see the iPad. To them, it's a hassle-free internet device that isn't likely to stop working or get infected with malware or have some other issue that they don't understand and can't fix. Want them to learn new skills and look for a better job? Much better to do both over the internet, where you don't have to drive around in a possibly broken-down car and burn expensive gas to look for a new job or go to school. Then again, it could also just be a way to spend more time and money on video games and movies...
  - deleted 12y ago
    [deleted]
  - cheald 12y ago
    I think that we can safely classify "internet access" as a necessity in first-world nations, regardless of income. But I'll happily say that iPads are a luxury when $30 Android phones exist. I have 3x Kyocera Hydras that I got on sale for $9 apiece, and they get the very same internet that a $650 iPad does.
    - monksy 12y ago
      Just found a Moto Droid X on the used market and flashed to page plus: ~$35 before shipping.
- nkozyra 12y ago
  "No options" for people who wish to purchase these things less than "in full." Like I said, it might be an absolutely terrible idea, but this business presenting the opportunity in this fashion actually reduces the overall risk for this demographic.
s1300045 12y ago
I actually sympathize with their business model. In the end, a business is to make money. They are charging people with ridiculous prices because the risk of them failing to pay is ridiculous certain. It really goes to show the culture of poverty, and how hard it is to break from it. These people simply do not have the means or even the faintest idea to better their situation. It is very, very sad. They have no chance of breaking away from this vicious cycle. It is a major societal problem. This business model is exploitative and downright evil. But they are not the problem. They are merely the symptoms. Getting rid of those rent-to-own shops won't fix the broken system.
- lost_name 12y ago
  It seems people disagree with your statements but you make a really good point. > They are charging people with ridiculous prices because the risk of them failing to pay is ridiculous certain. > This business model is exploitative and downright evil. But they are not the problem. Indeed, the problem is that these business are kept open by people who do not budget properly. Closing these businesses doesn't mean these people will have more money to spend on things that matter. We can say they aren't helping, but we can't say the consumers would better allocate their money.
rdmcfee 12y ago
I think this is a complex issue. I suspect that like with cars, many of these folks would have the option to buy a used item which is equally as functional for something like 20% of the price of a new item. Again, like cars, household items depreciate extremely rapidly. There's clearly some blame to go around. Better public education on financial decision making would help. The companies providing this type of financing could alter their business model or screening processes. Also, it seems that many lower income individuals strive to own new items because it portrays financial success even if it results in the opposite.
nsxwolf 12y ago
There are cheaper couches.

by nkozyra 12y ago

bluedino 12y ago

>> As the article points out, there are no options for these people outside of this. Going without a 60" TV or iPad isn't an option?

plorg 12y ago
The TV, no, but it is entirely possible that the iPad is being used for internet access. At this point in time a person without internet access is at a serious disadvantage to the larger population.
- S4M 12y ago
  How about buying second hand computers or laptops?
  - JetSpiegel 12y ago
    The amount of computers just thrown away should be enough.
- tgb 12y ago
  It would take about 11 weeks of payments to save up for the ipad to get one from eBay instead ($230 on ebay for 2nd gen 32gb model, 19 dollars a month for 72 weeks from buddy's). I wouldn't want to do without the internet for that long, but if they cancelled their internet for a month (which they wouldn't need without the ipad in this hypothetical) they'd be able to buy in maybe 2 months. Is two months of having to use the internet from the library really worth spending $1000 on when you can't even afford a $230 ipad? Sorry, but there are other options.
- notahacker 12y ago
  What proportion of Buddy's customers need home internet access via a second hand iPad2 immediately (ultimate cost $1400) as opposed to internet access via second-hand Android tablet (cost <$100) after waiting a month? I'd be surprised if it was double digits.
arenaninja 12y ago
I'm with you on TV, not so much on the iPad (or other device that lets you access the internet). I don't own either, but I do own a desktop. Homework with an e-mail component is increasingly onerous, my niece gets it all the time, but she has no internet access at home (in Los Angeles), save for her phone. At best anecdotal evidence, but it does make me empathize with people who suddenly find themselves in need of an expensive piece of electronic equipment to be able to function in modern society. You might (rightly) point out that there are alternatives for the iPad, but how many people are really aware of them? A lot of people don't even call a tablet 'tablet', they call it an 'iPad'
cookiecaper 12y ago
Those aren't the only things that people rent to own. Most people rent basic household furnishings like couches, mattresses, and tables. Aaron's et al will offer other things to try to upsell you, like iPads, but that doesn't mean the entire sector is egregious. I believe there is a place for businesses like these. They're making an offer for important things, while possibly not quite absolute necessities definitely very useful "luxuries", to a group of people that would otherwise not be able to have them. No one else is willing to touch the prospective borrower in this situation because they are massively high risk. If you're in that position, you have to accept that people are going to want to be compensated for their exposure. If the only way to get a couch was to buy it over again each year for four years, would you do it? Remember, it's your only reasonable option to actually get a couch that you don't pull directly out of the landfill. Some people may go without a couch and be fine, but I don't think it's unreasonable to RTO a couch or a bed if it's your only option to get a decent furnishing.
- knowaveragejoe 12y ago
  > it's your only reasonable option to actually get a couch that you don't pull directly out of the landfill. Except that isn't even remotely true.
  - cookiecaper 12y ago
    I think it can be remotely true. You could say they could go to a garage sale, and they may find something acceptable at a reasonable price, but what if they don't have a vehicle large enough to transport it or people to help load and unload it? Most RTO places offer delivery, and most garage sales don't. It's more or less the same case with Craigslist; while your chances of finding someone willing to make delivery may increase, you only have a crappy photo taken with a potato to try to decide if you want it or not. Compare to buying a couch like a normal person at a normal furniture retailer. If you have the income to sustain the payments and know that you'll be paying more in the long run, it's a tradeoff some people are willing to make. Most of the time, you can pay off rentals early. The same kind of shenanigans go on with any financial instrument when one is considered "high risk". Credit cards charge ~30% APR until you have a well-established credit history. Car loans cost 15-20%. In any of these cases, you're a fool if you let the full term run out at those rates. You could say that someone doesn't need a car to get by, but it sure helps a lot, and so does a decent bed if someone is trying to get a good night's rest and be functional for work the next day. RTO does serve a legitimate purpose. It's just expensive, but sometimes that tradeoff can be reasonable.
ufmace 12y ago
I may often not be super-sympathetic to the disadvantaged, but I can definitely see the iPad. To them, it's a hassle-free internet device that isn't likely to stop working or get infected with malware or have some other issue that they don't understand and can't fix. Want them to learn new skills and look for a better job? Much better to do both over the internet, where you don't have to drive around in a possibly broken-down car and burn expensive gas to look for a new job or go to school. Then again, it could also just be a way to spend more time and money on video games and movies...
- deleted 12y ago
  [deleted]
- cheald 12y ago
  I think that we can safely classify "internet access" as a necessity in first-world nations, regardless of income. But I'll happily say that iPads are a luxury when $30 Android phones exist. I have 3x Kyocera Hydras that I got on sale for $9 apiece, and they get the very same internet that a $650 iPad does.
  - monksy 12y ago
    Just found a Moto Droid X on the used market and flashed to page plus: ~$35 before shipping.
nkozyra 12y ago
"No options" for people who wish to purchase these things less than "in full." Like I said, it might be an absolutely terrible idea, but this business presenting the opportunity in this fashion actually reduces the overall risk for this demographic.

s1300045 12y ago

I actually sympathize with their business model. In the end, a business is to make money. They are charging people with ridiculous prices because the risk of them failing to pay is ridiculous certain. It really goes to show the culture of poverty, and how hard it is to break from it. These people simply do not have the means or even the faintest idea to better their situation. It is very, very sad. They have no chance of breaking away from this vicious cycle. It is a major societal problem. This business model is exploitative and downright evil. But they are not the problem. They are merely the symptoms. Getting rid of those rent-to-own shops won't fix the broken system.

lost_name 12y ago
It seems people disagree with your statements but you make a really good point. > They are charging people with ridiculous prices because the risk of them failing to pay is ridiculous certain. > This business model is exploitative and downright evil. But they are not the problem. Indeed, the problem is that these business are kept open by people who do not budget properly. Closing these businesses doesn't mean these people will have more money to spend on things that matter. We can say they aren't helping, but we can't say the consumers would better allocate their money.

rdmcfee 12y ago

I think this is a complex issue. I suspect that like with cars, many of these folks would have the option to buy a used item which is equally as functional for something like 20% of the price of a new item. Again, like cars, household items depreciate extremely rapidly. There's clearly some blame to go around. Better public education on financial decision making would help. The companies providing this type of financing could alter their business model or screening processes. Also, it seems that many lower income individuals strive to own new items because it portrays financial success even if it results in the opposite.

nsxwolf 12y ago

There are cheaper couches.