USA Today is reporting that the rent-to-own industry is riding high on the recession.
Aaron's, the second-largest retailer in the $6.3 billion industry, plans to open 200 stores in 2010 on the heels of an 18% increase in same-store sales last year.
Rent-to-own stores lease electronics, appliances and other household items by the week or month. Payments can be applied toward a purchase, but critics say the industry makes payments so high that a product's ultimate purchase price is exorbitant.
That's not always the case according to industry officials who say just 5% of their customers end up buying their products; customers are simply looking for short-term solutions when critical appliances go kaput.
The ability to get a new refrigerator for less than $18 a week is a benefit that shouldn't be minimized, Rent-A-Center's Dwight Dumler told USA Today. Besides, he says, "If they buy a used refrigerator at a garage sale three weeks later, they can end the rental with no further obligation."
About 75% of Rent-A-Center's customers return the merchandise they rented within 17 weeks.
Tighter credit and concerns about job losses make many consumers leery about buying or financing appliances or furniture, Tanner says. Renting, he says, seems less risky.
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