SEATTLE — The back-to-school shopping season has arrived.
According to the National Retail Federation (NRF), families with children in elementary through high school plan to spend an average of $864 on school items, approximately $15 more than last year.
The NRF reported a "dramatic" increase in back-to-school spending since the onset of the pandemic, as families adjusted to changes from virtual and hybrid learning. Compared to 2019, back-to-school shoppers are expected to spend $168 more on average, and total spending is up by $11 billion.
The Better Business Bureau of Washington said "buy now, pay later," offers are likely popping up while parents and college students are shopping online.
The agency put out warnings and encourages consumers to research the payment option and buy now, pay later services thoroughly.
“Most of the time, the way this works is, the option is actually coming from a third party financing company. It's not that retailer providing the financing," said Logan Hickle, communications director of the BBB of Washington. "A completely separate entity. They make money by charging that retailer a small percentage of each sale."
Hickle said these third-party companies also look to collect late fees and possibly interest from consumers.
That interest can really range depending on that credit history in that retailer from zero to 30% and installments can last as little as a few weeks or as long as 39 months.”
The BBB of Washington wants consumers to know a "buy now, pay later" option is "essentially a loan."
“Even though many of these installment payments services come with only a few small payments and 0% interest, it's critical to remember that it's still borrowing money to enjoy a product before it is paid for in full," Hickle said. "You need to ask yourself if paying that total price means spending more than you can actually afford.”
Overall, the BBB of Washington said it's important to read all fine print to better understand how long the financing terms are to pay off that purchase and how many installments.
Hickle said consumers should research the company providing the financing and how it handles late payments.
"You need to look that company up on websites like bbb.org and see what people are saying out in the marketplace," Hickle said. "See if they're honest, see if they're ethical, and see if they're reputable."
Checking on any potential credit score impacts is also recommended.
Hickle said any unpaid debts can be sent to collection agencies.
"After a delinquent period of 90 days, they can be reported to the credit bureaus and that could have a negative impact on your credit score," Hickle said.
For a look at all back-to-school shopping recommendations from the BBB of Washington, click here.