Black Friday: Is ‘Buy Now, Pay Later’ option worth it?

Black Friday is around the corner, and shoppers around the world are looking forward to getting their hands on their most-wanted items. To sweeten the deal with additional discounts, merchants are offering “Buy Now, Pay Later” (BNPL) at checkout.

The option allows consumers to split the cost of a large purchase into smaller, often interest-free instalments, providing convenience and flexibility. However, a shopping spree can soon turn into a debt trap if the model is misused.

WHEN IS BLACK FRIDAY?

Black Friday takes place on Friday, 27 November. 

The shopping extravaganza occurs on the fourth Friday in November, after the US holiday, Thanksgiving.

Although it originated in the US, over the years Black Friday has become a major shopping event in South Africa and other countries. Retailers offer discounts on everything from electronics and appliances to clothing, furniture and groceries.

WHAT ARE BUY NOW, PAY LATER OPTIONS?

Currently, South Africans can pay for items such as clothing, household appliances, beauty services, furniture, and even food in instalments rather than making traditional upfront purchases.

Buy Now, Pay Later (BNPL) service providers include the following:

• Payflex
• Pay Just Now
• Happy Pay
• Zero Pay
• Microbed
• Float

Several banks, including Tyme, Standard Bank, Nedbank, and Absa, are also offering similar instalment repayment options.

The interest-free instalments are short-term. However, late payments can incur hefty penalties and bank fees, and, if unpaid, even legal action.

When it comes to Black Friday shopping, is the BNPL option worth the fuss?

The model works in consumers’ interest if it is managed responsibly. However, if misused, it can create a sense of false affordability.

Take a look at the pros and cons before checking out…

BUY NOW, PAY LATER PROS	CONS
Pay in smaller instalments instead of one large amount.	Consumers can be deceived into believing that small instalments can make expensive items appear more affordable than they are.
Interest-free options, provided you pay on time	Late-payment fees incur hefty penalties that increase with interest each week. Missed payments can affect your credit record and result in legal consequences.
Some providers provide the option to receive your purchase without paying the full amount upfront.	Consumers have to commit to continue to pay for an item they have already received.
Paying a portion of an item can ease cash flow.	Your next salary could already be committed to paying off previous purchases.