75AG said:
Don't they make even more money on finance charges? They give up some percentage for credit card, but it's not 10%. All that to say, I don't think cash is king on furniture. But then again, I really don't know nuthin'.
Probably not. In fact they probably lose money on "in house" financing. Usually "in house" actually means it's a private label credit card through a bank (ie Synchrony) and those programs charge the retailer several points more than Visa or MasterCard does. That 60-months same as cash deal consumers love to take may cost the retailer as much as 15% of the total of ticket, sales tax included. Even the deals that feature interest to the consumer cost between 3% and 6% to the retailer in most cases.
If you watch prices over time from places that offer those kinds of deals you'll actually see them increase when there's a 0% deal so that the sofa that's $3000 in normal times might be $3500 at 0% times. Go to Furniture Row and you'll see a sale price and a monthly payment. Add up all the monthly payments and it's several percent higher than the sale price. It's an effort to pass on their fee to you.