Imagine a customer scrolling through your online store, captivated by a product but hesitating because the price feels too big a commitment.
They love what you’re offering, but the idea of spending $300 upfront stops them. This customer might have bought that item if it didn’t feel like such a big hit to their wallet.
Or, maybe they would still buy it—despite the price—if you offered a payment plan. Payment plans aren’t a magic fix for everyone, but they’re incredibly effective for impulse buyers.
And that’s exactly what I’ll discuss in this roundup—impulse buyers and how payment plans can help you close more sales and build a stronger business.
First, you need to understand the psychology of an impulse buyer. These shoppers make decisions quickly, often driven by emotions rather than logic. They see something they want, and the desire to have it right away overtakes them.
But if the price feels overwhelming, it creates a mental block that snaps them out of that impulse. Payment plans remove this roadblock by splitting the cost into smaller, more manageable chunks.
Instead of focusing on the total price, the buyer sees a more digestible number, like “$50 today,” which feels like a much smaller commitment.
To give you some perspective, consider the booming success of Buy Now, Pay Later (BNPL) platforms like Klarna, Afterpay, and Affirm. These services have reshaped the way people shop online.
According to a report by Insider Intelligence, BNPL transactions accounted for nearly $100 billion in global sales in 2021, and the numbers are expected to triple by 2026.
What’s more, around 60% of BNPL users are millennials and Gen Z shoppers, groups that are known for their love of convenience and instant gratification. When you offer payment plans, you’re essentially aligning your business with modern shopping preferences.
Take a look at how major retailers like Sephora and ASOS use payment plans. Sephora, for example, partners with Klarna to allow customers to break down the cost of high-end beauty products into four interest-free payments.
This makes a $200 skincare set feel much more affordable to someone who might balk at the idea of paying that amount all at once. ASOS, on the other hand, makes use of Afterpay to target fashion-conscious younger shoppers.
The results? Both brands report increased conversions, higher average order values, and fewer abandoned carts. If it’s working for billion-dollar companies, it can work for your online store too.
Let’s talk about conversions because that’s the ultimate goal here, isn’t it? According to a study by PYMNTS, offering payment plans can boost cart conversions by up to 20%.
That’s a significant jump, especially if you’re dealing with impulse buyers who are teetering on the edge of purchasing. By giving them the option to split their payments, you’re removing one of the biggest obstacles to completing the sale: hesitation over cost.
Payment plans also have the power to increase your average order value (AOV). Think about it—if a customer sees they can pay in installments, they’re more likely to add higher-ticket items to their cart or even tack on extra products they wouldn’t have considered otherwise.
A Klarna case study revealed that retailers using their service saw a 58% increase in AOV. Let’s put this in perspective for your business. Imagine your typical order value is $100. With payment plans, you could see it rise to $158. Over hundreds or thousands of transactions, that’s a substantial boost to your revenue.
Now, let’s address another common scenario. Have you ever noticed that some customers keep browsing your store without making a purchase? These are your “window shoppers.” They like what they see but aren’t quite ready to commit.
Payment plans can turn these browsers into buyers by shifting their mindset. Instead of thinking, “I can’t afford this right now,” they start thinking, “I can manage $10 a week.” It’s a subtle but powerful change that can drive more sales for you.
There’s also a trust-building element to offering payment plans. When you give your customers flexible options, you’re showing them that you understand their needs and are willing to work with them.
This can create a sense of loyalty and goodwill, making them more likely to return for future purchases.
Apple, for instance, has mastered this with its iPhone Upgrade Program. By allowing customers to pay for their phones in monthly installments, Apple not only makes its high-priced products feel more accessible but also keeps customers coming back year after year to upgrade their devices.
The flexibility of payment plans doesn’t just benefit your customers—it benefits you too. Offering these options can set you apart from competitors who only accept traditional payment methods.
In today’s competitive e-commerce landscape, being able to say, “We offer easy payment options” can be the deciding factor for an impulse buyer choosing between you and someone else.
Let’s not forget about the marketing opportunities that come with payment plans. Imagine running ads or sending email campaigns that say, “Take it home today for just $20!” It’s a compelling message that can catch the attention of impulse buyers scrolling through their social media feeds.
You can also use urgency to your advantage. For example, “Pay only $10 today—offer ends tonight!” taps into the impulse buyer’s fear of missing out (FOMO), nudging them to act fast.
Here’s another real-life example to show you how effective payment plans can be. Peloton, the fitness equipment giant, skyrocketed to success by offering financing options.
Their bikes and treadmills, which cost thousands of dollars upfront, became much more accessible when customers were given the option to pay in monthly installments. This strategy not only made Peloton products feel affordable but also turned the company into a household name.
Of course, you might be wondering if payment plans are worth the effort if you’re running a small business. The answer is yes. There are plenty of tools out there, like PayWhirl or Partial.ly, that make it easy to offer installment payments without taking on the risk yourself.
Plus, third-party BNPL providers like Klarna often take on the responsibility of collecting payments, so you get paid upfront while they handle the rest. It’s a win-win situation.
You might also worry that offering payment plans could lead to more returns or cancellations. While this is a valid concern, data suggests the opposite.
According to Klarna, customers using BNPL options are actually less likely to return items because the smaller payments make them feel less buyer’s remorse. That’s one more reason why offering payment plans is a smart move for your business.
Let’s think about this in terms of simple psychology. Imagine you’re at a coffee shop, and the barista offers you a loyalty card that gives you your 10th coffee for free. You’re more likely to keep coming back because it feels like you’re working towards a reward.
Payment plans work in a similar way. By breaking down the cost, you’re giving customers small, manageable wins with each payment, making the overall purchase feel less daunting.
The bottom line is this: payment plans are not just a sales tool; they’re a customer experience enhancer. They remove barriers, build trust, and create opportunities for your business to grow.
Whether you’re selling high-ticket items, luxury goods, or even everyday products, offering flexible payment options can help you capture impulse buyers who might otherwise walk away.
I hope you’ve learned just how impactful payment plans can be for your online store. They’re not just about making sales today; they’re about building a sustainable, customer-centric business that thrives in the long term.
So, if you haven’t already, consider implementing payment plans and watch how they transform your sales strategy. After all, sometimes the smallest changes can lead to the biggest wins.