Model Shops offering payment via installments

[AY Mod]

3 hours ago, woodenhead said:

It creates a perception that everyone is buying everything and puts pressures on others to try and keep up and of course there is the FOMO (fear of missing out) element that this social media marketing creates.

 

Mix in the tyre kickers I see, particularly on Facebook etc., who say they'll have it but can you wait until the end of the month when they get paid etc. By then they've decided they'll have something else instead or that all next month's money has been spoken for and think nothing of messing people about.

[jjb1970]

10 hours ago, AY Mod said:

 

Mix in the tyre kickers I see, particularly on Facebook etc., who say they'll have it but can you wait until the end of the month when they get paid etc. By then they've decided they'll have something else instead or that all next month's money has been spoken for and think nothing of messing people about.

 

This is another part of why I don't pre-order much (I admit I do pre-order from time to time). If I pre-order (either from a shop or direct from a manufacturer) I consider it a committment which I have to honour. If I pre-order and the item is subsequently not delivered after the order was accepted I take a rather dim view of things, but that cuts both ways and the seller should reasonably expect the buyer to honour the order too. I don't know what my circumstances will be 6 months, a year or more down the line. Financial circumstances change, and although my interest in trains has been a constant since I was knee high my specific interests do wander around a bit.

[John M Upton]

I find it interesting that when the latest shiny new model finally starts arriving at people's front doors, the next thing is a fair few posts across social media promptly offering them up for sale again, often with a 'accidentally ordered two by mistake' or 'have changed era/gauge/setting' excuse 'honestly' attached...

 

Two explanations - 1, they have just realised they have run out of readies or 2, they are buying purely to resell at a profit.

[Andy Hayter]

or 

3.  Due to Hornby's bizarre treatment of traders in the past, I ordered from 2 different shops in the hope of getting one and forgot that I had done so. 

[OnTheBranchline]

On 13/08/2023 at 03:46, John M Upton said:

Alternatively, learn from days of old, if you haven't got it, don't spend it.  There is a reason why credit and other related systems were known as 'The Never Never'...

 

With respect, you and I, and a lot of people here know that this is common sense but life is sometimes not that straight forward and what's simple to you and I may be a struggle for others to understand/accept due to their specific situation.

 

I was just reading about someone's financial difficulties on another forum and it's really eye-opening how people manage their finances (or not!)

Edited September 18, 2023 by OnTheBranchline

[tigerburnie]

There are very few shops selling items related to model railways near mem, so I go to shows or buy online, however as I am now retired, large purchases no longer happen, there are far more important things to make largish purchases, if someone were to follow a lot of other businesses and offer credit, some even offer interest free, they are the ones likely to get my business

[AMJ]

@Michael Hodgson you have plenty of time to save up for a Jones Goods if that is what you mean by keeping up with the Jones! 😉

 

I have an account that I call slush fund where I stash money so that when I want a foreign rail trip or a new model I have the funds.

 

There are some folks who struggle to find funds when putting fuel into the car.

 

Currently I'm between jobs and have a few items on order as I know that I have money available.

[Michael Hodgson]

57 minutes ago, AMJ said:

@Michael Hodgson you have plenty of time to save up for a Jones Goods if that is what you mean by keeping up with the Jones! 😉

 

 

I've had that on order for about 18 mnoths now 😀

[DCB]

Father in law wanted a GWR 15XX outside cyl Pannier.    I was  going to build one then a RTR one was announced and so we waited. He died before it was released. Good job he didn't pre order one.   Its back on my to do list    Hornby Dublo Diesel shunter chassis, bits of Brass, probably Bachmann 2251 and 8750 body parts  Hornby Dublo and  Hornby  bits.   Maybe even a K's Body, 

[Great Eastern Models]

Great eastern Models, Norwich have payment plans whereby you can deposit funds of any amount at any time to build up a store credit.  When new items arrive into stock many people have enough store credit already built up to purchase a big item.

[woodenhead]

@Great Eastern Models How are these deposits protected, so the customer knows that they will not ever lose out?

 

For example any money deposited in a bank is protected against the bank failing up to £85000.

Edited May 15 by woodenhead
added banking example.

[Widnes Model Centre]

22 hours ago, woodenhead said:

@Great Eastern Models How are these deposits protected, so the customer knows that they will not ever lose out?

 

For example any money deposited in a bank is protected against the bank failing up to £85000.

Interesting question. @Great Eastern Models appear to be an extremely well run family business. Just like us they run a payment plan. I suspect just like us they have a separate system for savings. 
 

Now you could pose the same question to a ‘bigger model railway shop’ who take deposits for items not yet released. 
 

Or you could draw on millions who have paid £millions for Gift Cards from massive companies who then closed and didn’t honour deposits or Gift Cards. 
 

Comparing a model shop who are trying to help customers and they are, with your bank seems somewhat skewed. 

Edited May 16 by Widnes Model Centre

[woodenhead]

@Widnes Model Centre I was simply asking the question, and it would be the same question to any shop accepting deposits against no particular item as store credit.

 

Where is that money held and how it is protected for the consumer, that money could be better held in a savings account as it will attract interest, as store credit it will not and may be lost if the shop is forced to close. 

 

I only used the bank example as I am not aware of anything similar for shops to use, if there is such a protection scheme that shops can use to protect these store credits then great.  It's not something I would ever have thought of myself, giving a shop money upfront with no actual item purchased or ordered.

 

I have taken store credit in the past from Rails when selling stuff, I already had a plan for how to use the credit as soon as it was granted as I did not want to leave myself at risk as I did not believe there would be any protection or am I wrong?

[Widnes Model Centre]

1 minute ago, woodenhead said:

@Widnes Model Centre I was simply asking the question, and it would be the same question to any shop accepting deposits against no particular item as store credit.

 

Where is that money held and how it is protected for the consumer, that money could be better held in a savings account as it will attract interest, as store credit it will not and may be lost if the shop is forced to close. 

 

I only used the bank example as I am not aware of anything similar for shops to use, if there is such a protection scheme that shops can use to protect these store credits then great.  It's not something I would ever have thought of myself, giving a shop money upfront with no actual item purchased or ordered.

 

I have taken store credit in the past from Rails when selling stuff, I already had a plan for how to use the credit as soon as it was granted as I did not want to leave myself at risk as I did not believe there would be any protection or am I wrong?

Placing the money into an interest bearing account might seem sensible but who gets the interest, as it remains in our case the customers money? 
We only use our savings plan for ‘in stock items’. Customer brings an item to us and asked if they can pay for it on our savings plan. I.e instalments. When they have paid in full they take the item as normal. It doesn’t really help the shop as it’s taken off sale and you are putting your trust in the customer. 
 

We won’t take an instalment plan for items not yet released, we all know that item may never get into production. We won’t take any money for something that’s not in stock from any of our suppliers as we may not know when it will come back in stock, if ever.

 

I suggest that the risk is more with the shop, not the customer. Customers will sometimes ask can they have the money paid to us back for any number of reasons. We don’t say ‘No’. 
 

I can tell you that at this exact moment in time we have £6.87p held in savings. Just checked. This will increase in the run up to Christmas normally from around the end of August. But as l say that item is then taken off sale. 
 

Does this help our cash flow? Absolutely not, but it helps our customers and we know they appreciate it. 
 

The last time we sold a Gift Voucher and were asked how did they know that we wouldn’t run off with their £30? I looked around the shop and said ‘and leave all this behind?’ They laughed and apologised for not thinking that through. 

[woodenhead]

@Widnes Model Centre And I can see where what you are offering differs from what appears to be on offer from @Great Eastern Models, against items in stock, so a payment plan that happens to be interest free but less risk to either party especially if the customer pays the instalments on a card and can claim back if there is a problem. 

 

And I am not suggesting anything underhand on the part of any shops, but I worry how accepting deposits of any amount at any time as mentioned by Great Eastern leads to problems should they be unable to honour that credit down the line and no bank will touch it because it is effectively a cash transaction to them meaning no chargeback or consumer credit act protections against goods or service not received because there was no specific item in mind.  All being good nothing goes wrong, Great Eastern secure more business and people get to save for models, but as models get more expensive then the amount of deposits and therefore risk grows.

 

You might guess I used to work for a bank and in my current job my colleagues used to work with CAB.

[Widnes Model Centre]

@woodenhead. I can see where you are coming from. You say you worked in a bank. It’s around 16 years now since the five Banks went bust owing customers around £20 billion.

 

I doubt Great Eastern Models have anything like that amount in their savings plan. If they have I’m sure it’s in a locked cupboard, l just need to find out which cupboard. Train goes direct from Widnes to Norwich. Hope l don’t get stuck in the roadworks. Just been reliably informed the roadworks are completed. 

 

Money safe in a bank, but only up to £85,000? I’ll take my chances with any model shop. 

 

You know it makes sense.

 

[jjb1970]

Deleted, realised I said the same thing on page 1.

Edited May 17 by jjb1970

[spamcan61]

13 hours ago, woodenhead said:

@Widnes Model Centre And I can see where what you are offering differs from what appears to be on offer from @Great Eastern Models, against items in stock, so a payment plan that happens to be interest free but less risk to either party especially if the customer pays the instalments on a card and can claim back if there is a problem. 

 

And I am not suggesting anything underhand on the part of any shops, but I worry how accepting deposits of any amount at any time as mentioned by Great Eastern leads to problems should they be unable to honour that credit down the line and no bank will touch it because it is effectively a cash transaction to them meaning no chargeback or consumer credit act protections against goods or service not received because there was no specific item in mind.  All being good nothing goes wrong, Great Eastern secure more business and people get to save for models, but as models get more expensive then the amount of deposits and therefore risk grows.

 

You might guess I used to work for a bank and in my current job my colleagues used to work with CAB.

If a bank goes bust will I get my money back - yes. If a shop goes bust will I get my money back - probably not, I don't see the point in taking the risk. As we see time and time again with the aforementioned store cards / credit / wedding planners etc.

Edited May 17 by spamcan61

[Widnes Model Centre]

This topic was about shops who offer payments in instalments. 
 

It’s actually thrown up a very interesting view on what protection they afford?

 

We have only been in this business for 13 years but l personally can only recall one shop going bust and owing massive, in my opinion, amounts of money. Money was owed to suppliers.

 

l know of many suppliers, manufacturers in this industry who have gone bust and left retailers in the lurch. 
 

When we first started everything had to be paid up front or to use the correct term, pro-forma. Even after thirteen years, some of the suppliers still insist on payment before goods are despatched. Companies that once sent goods to retailers on credit terms have reverted back to pro-forma. Must add that’s not our shops fault, it’s suppliers who have changed to this method of payment. This occurred during 2020, suppliers got twitchy over credit terms. The date was very significant. 
 

From personal experience, when a supplier is, in some cases on a slippery slope they turn to retailers to support them. We have lost significant amounts of money with suppliers going bust. On two separate occasions we have had suppliers demanding payments for items we were never sent. The first one was easily dealt with. They copied me into an email which should have been internal only. To paraphrase ‘ best drop this account pursuit, he can see we are trying to pull the wool over his eyes’. Phone call to that company was amusing to say the least. Small supplier, no, massive one. The second company tried to get payment from us for goods supplied after a certain date. When everything had to be paid upfront. Huge company. No apology received. With that company, warranty reverted to ourselves. In recent years we have had invoices with second request for payment. Already paid. Sorry, it’s our computer issue. 
 

Your local or otherwise model shop is only trying to help in what are particularly difficult times. 
 

Sure banks are pretty secure, only if you have less than £85,000 in them. Pension pot, stocks and shares ISA anyone?

 

Have a great day. It’s been an eye opener. 
 

 

 

Please don’t have a go at shops who are trying to help and keep on trading.

Edited May 17 by Widnes Model Centre
Finish sentence

[JohnR]

There is zero protection with regards to gift cards, and yet its a multi-billion pound aspect of the retail industry, which is why everyone offers them. 

[ITG]

On 17/05/2024 at 10:41, JohnR said:

There is zero protection with regards to gift cards, and yet its a multi-billion pound aspect of the retail industry, which is why everyone offers them. 

Unless, I assume, one pays for said gift card by credit card, then Section 75 chargeback protection would surely apply if the retailer went bust. I wonder also if similar would apply to instalments paid to a model shop by credit card. If they accepted such payments for savings schemes.

Ian

[Michael Hodgson]

 

 

To protect the customers such money should ideally be held in a Client Money Account (CMA), which is an account opened by a UK and European Economic Area regulated firm (such as an Estate Agency, Accountant or a Solictors firm) to hold money that belongs to one or more of that institution's clients. In the case of a CMA, the firm acts as a trustee of the account, but the funds still belong entirely to the client(s).

 

I don't think this type of account is available to ordinary businesses however, but the idea is that if the firm goes bust, money in the Clients Account is safe - the liquidator can't take it to pay the business's debts.

 

[John M]

In this part of the world (New Zealand) the majority of payments are electronic by payment with a high proportion of retailers offering a buy now pay later options using providers like Afterpay & Laybuy. The retailer gets their sale and the credit company collect their interest like hire purchase in the old days.

https://www.laybuy.com/nz/how-it-works

 

Get a bit much when they offer 'easy payment" options in the model shop on a tinlet of paint or your groceries at the supermarket.

 

Back in the old days a model shop in Dublin who directly imported Liliput and Trix models offered a savings club for regular customers (collectors) to save up and buy relatively expensive Continental models. Very much on the honour system I doubt that there were formal systems of consumer protection, but it seemed to work,

 

 

[jjb1970]

If people have a credit card they may as well just use that. Yes, APR is high but the interest on the price of a locomotive won't be that high if you pay it off over 3 months. Alternatively,  if you have a credit card you may as well also sign up for PayPal and look for their interest free options. 

 

That said, I  still think the best approach for discretionary purchases is to save in advance. Simpler and you keep full control of your money. The argument I have heard against it is problems setting aside a few quid each month, but that applies to any save or credit scheme.