Massage Chair Financing Information
We offer GE Capital financing for those who wish to avoid using their credit cards on their new massage chairpurchase. GE financing provides some deferred interest options that are appealing to buyers. We can also offer equal payment options for a massage chair purchase.
On our website, up to the current time, we have been offering only 2 plans - 6 months deferred (or 0%) interest with a minimum monthly payments AND 12 months fixed interest (9.99%) with fixed monthly payments.
Before May of 2011 we could offer zero interest/zero payment plans, which I am sure you remember well. But, with the advent of the Credit Card Act (or something like that), the zero payment options were removed by the federal government. Zero interest could still be offered but with a minimum monthly payment instead of NO payment at all. For us, that minimum monthly payment has been 3.5% and that amount was established by GE and not us at Massage Chair Relief. I understand that the minimum monthly payment percentage has recently been increased to 3.75%.
1, 2, and 3 Year Zero Interest Massage Chair Plans?
I have been asked many, many times why we don't offer 1, 2, or 3 year deferred interest plans since some other retailers are offering those options. Well, the reason is processing fees. Let me explain...
Financing plans, along with credit cards, charge the retailer a certain percentage for the "privilege" of using their financing options. Credit cards typically charge an average processing fee to the retailer of around 3% (for Visa, MC, and Discover) or 3.5% (American Express). What that means is that I, as a retailer, get charged approximately 3% when someone buys a massage chair on our website or in our showroom with a Visa, Mastercard, or Discover card. So, what that means is that if you go onto our website or come into our showroom and purchase a massage chair with your Visa card, I get charged about 3% by Visa for the privilege of accepting Visa as a payment option. The purchaser never sees that as it is a processing fee charged to my bank account after the transaction has been made, and behind the scenes.
Financing companies do the same thing, except they charge more percentage points for more liberal financing options. For example, for the two plans we offer now this is what processing fees I have to pay for a massage chair transaction:
1. 6 month no interest/minimum payment option - 3.39%
2. 12 month fixed interest/equal payment option - 4.79%
So, as you can imagine, these processing fees cut into our profit margin. These are real costs to my business. The reason we have not been offering 1, 2, or 3 year zero interest plans is because the processing fees would be 7.09%, 15.59%, and 15.49%, respectively (equal payments rather than monthly minimums on the 3 year option). On some of those plans, the processing fees are GREATER than my profit margin. That is the only reason we don't offer those extended zero-interest plans...plain and simple. It is about the bottom line.
Massage Chair Financing Alternative
But, we have learned of some alternative ways to deal with these high processing fees. Here is what can and may be done to beat them...
1. We just sold a massage chair (Osaki 4000) to a client who was willing to pay a good portion of the processing fees just so that he could get the 3 year zero interest plan. It wasn't all that much more for him, as I paid the remaining portion of it. So, that is one option, pay a little more up front to offset the higher percentage processing fees.
2. On the suggestion of a colleague in my industry, I may be able to join an association where the group processing fee rates are less for the group than they are for an individual operation such as ours. I am currently looking for something like that as well.
In the meantime, keep an eye on our financing page on the website to see if we add any other financing options (just click on the yellow post-it note on the right hand side of any product page on our site) or send me an email at [email protected] or give me a call at 801-651-2026 if you'd like to figure out a 1, 2, or 3 year financing plan for your massage chair. We'll figure something out for you.
Dr. Alan Weidner