In a world where the cost of living is constantly on the rise, and household budgets are stretched thin, the allure of ‘buy now, pay later’ (BNPL) services like Afterpay is undeniable. These services promise a way to manage expenses by spreading the cost over time. However, the recent move by some supermarkets to offer Afterpay for everyday essentials has sparked some chatter among Australian consumers, especially those on fixed incomes who are more mindful of financial challenges.
When Drakes, an independent supermarket chain in South Australia and Queensland, began advertising Afterpay for everyday items like pickles and sausages, it certainly raised some eyebrows. A post from a Reddit user, featuring a large blue Afterpay tag beneath grocery items, sparked a conversation about the implications of using BNPL services for basic necessities.
The sentiment among many shoppers is clear: if you need to Afterpay your groceries, perhaps you can’t truly afford them. This perspective is rooted in the concern that BNPL services could lead to a dangerous cycle of debt, especially for essential items that need to be purchased regularly. The worry is that each shopping trip builds upon the last, creating a snowball effect of debt that becomes increasingly difficult to manage.
On the flip side, some defend the use of Afterpay, arguing that it can be a lifeline for families struggling to make ends meet. They suggest that when used responsibly and with strict self-discipline, BNPL services can help spread the cost of bulk purchases, such as large bags of rice or spices, which may save money in the long run. These users emphasise the importance of not viewing Afterpay as extra money but rather as a budgeting tool.
Drakes has responded to the criticism by stating that the introduction of Afterpay was a response to customer feedback, emphasising the importance of offering diverse payment options. They argue that it’s about providing choices and listening to customers’ preferences.
Drakes explained that Afterpay is just one of several initiatives aimed at helping customers manage the rising cost of living. The spokesperson highlighted the supermarket’s range of catalogue specials and exclusive price drop offers, achieved through close collaboration with suppliers. They also encourage customers to buy in-season produce for better quality and affordability and to pay attention to unit pricing on product labels to make informed choices.
Afterpay, for its part, maintains that its service is a safer and more affordable alternative to traditional credit, citing that the majority of its customers use the service responsibly. According to their Q4 2023 earnings report, 95% of instalments were paid on time and 98% of purchases incurred no late fees, highlighting that a significant portion of users are managing the service without issues.
Have you used Afterpay for groceries? Do you see it as a helpful budgeting tool, or does it create financial challenges? Share your thoughts in the comments!
Also read: Consumers the winners in radical change for buy now, pay later products
