Many Americans have never really taken a first look let alone a new look at rent-to-own but, at least when pressed, Americans know what is rent-to-own. Or, so they think they know. But you have to press as rent-to-own is still a little known industry to the general public. “You know, Rent-A-Center, Aaron’s, Colortyme…” That’s the common set up question for the general public to answer “Oh Yeah. Those guys.” Next, an uncomfortable silence, then a different topic ensues or a derogatory remark. It has been a standard public conversation or feeling about the rent-to-own industry within the public domain and is why 27 years ago, rent-to-own dealers created a trade association and a journey to legitimize their relatively new industry and an industry born out of market need and capitalistic thin air.

Three decades of an industry being forced into court battles, legislative debates and negative newspaper headlines does one of two things to an industry. It either eliminates them or sets forth forces to change and improve the industry to public acceptance and market success. What is most interesting about the rent-to-own industry is within the industry you will never find a more giving, welcoming family type of atmosphere among competitors than the rent-to-own industry. Also, interesting, you will never find a more satisfied and grateful customer.

The rent-to-own customer is statistically ten points more satisfied than retail customers and are fiercely loyal to their rent-to-own employee thus their company more than most other retail industries in the American market. In other words, if you are in the rent-to-own industry whether as a customer, employee or owner, you know its power, camaraderie and the pride everyone takes in a happy customer and a successful business. It is a true success story. But, outside the industry, the public knows very little about the rent-to-own industry and the little they do know is negative. But, that negative image is changing before our very eyes and, once again the statement must be reiterated – take a new look at rent-to-own.

First of all, let’s take a new look at the obvious changes that has occurred within the rent-to-own industry in the past three decades. The rent-to-own household merchandise – furniture, electronics, appliances, and, now computers the industry traditionally rents, sells, or rents to own - are all name brand products such as Sony, Dell, Ashley, Whirlpool, JVC, etc. The rent-to-own products are the top named merchandise and, yes, brand new out of the box. Now, if you want the best deals on used household goods, go to rent-to-own. Because, customers are constantly returning items, therefore the quality and quantity of used furniture, appliances and electronics are abundant at any rent-to-own store so you can grab the best used deals at your local rent-to-own store.

Secondly, there’s the perception regarding the long-term obligation to the rent-to-own transaction you committed yourself. With rent-to-own, you have either committed with one payment an obligation of one week, two weeks or one month whichever term you chose. And that’s it. And, it is one of the most ill conceived perceptions of the rent-to-own industry that you are committed to a long-term contract which is completely false. The very success of the rent-to-own industry is the fact that you are never obligated to make the next payment, that you can return the product at anytime at no penalty or damage to your credit, that credit is never extended and the customer never goes into debt. It is the very crux of the entire rent-to-own industry, which many people do not understand and when explained, people immediately begin to think differently about rent-to-own.

But, let’s get to the heart of the matter of public perception – the cost to rent-to-own. First of all, let’s be perfectly clear. If you rent-to-own a refrigerator for one week at a time for two years to achieve ownership you will pay significantly more, most likely twice as much. It is the nature of economics that with more payments over a longer period of time you will pay more. This is where critics are the most vehement because the overall price is much more in this one scenario but less than 25 % of rent-to-own customers actually rent-to-own to full term. They either return the product or choose the early purchase option. But, to those who rent-to-own to the most expensive option, they are usually the customers whose credit needs the most repair and consistent rent-to-own payment histories are just the ticket even to the path of home ownership. Rent-to-own payment histories have now been included in the major credit reporting agencies for home ownership.

Let’s stay on the rent-to-own price issue, which has been one of the most pressing criticisms, and take a new look. With the modernization of the rent-to-own business and the fierce competition for customers, rent-to-own is lowering prices throughout the industry. Better purchasing power from a united industry to improved business practices such as lowered debit card transaction fees through Moneris are passing the savings to the customer and it is reflecting in the increase in 300,000 customers in the past two years. And the significant increase in customers has happened during an economy that has done very well. So critics cannot claim rent-to-own’s success as a factor of hard economic times and a vulnerable customer because its recent growth has been through the best of economic times.

What is more interesting, in the next two years where credit will be tightened, interest rates increased and a potential slowing of the economy, rent-to-own could see even a more significant spike in customers because if you use the rent-to-own transaction wisely you can obtain household merchandise for a retail price without ever going into debt or jeopardizing your credit yet paying significantly less than on a credit card. It is very important to note that the customer is in full control of the rent-to-own transaction. They choose the payments and terms and can change those payments and terms at any time during the transaction without penalty. And can exercise the early purchase option at any time. Of course, the customer can return the product at any time for any reason without penalty. With a credit card, the customer is obligated to the lending institute and is governed by their strict rules and harsh penalties.

With the recent lowering of cash price in rent-to-own, you can now rent-to-own a computer for 3 to 6 months same as cash that means you pay around $50 more than Circuit City but you are not obligated and yet you are still staggering payments. Secondly, if you choose monthly payments for a year you are still paying similar to a credit card if you made the full payments on the credit card. If you made the minimal payments on a credit card, then renting-to-own is significantly cheaper yet your credit is never threatened. You can change the payment structure at any time throughout the transaction and the early purchase option is always there to save you significantly throughout the entire transaction. The rent-to-own transaction is the most flexible transaction in the marketplace, which is why so many other industries such as musical instruments, houses, wheel rims, and even art galleries are becoming successful rent-to-own operators for their industries as well.

Lastly, and the most significant market change in the industry are the lifetime reinstatement rights. The most vocal criticisms is that the customer makes all the payments but one then must return the product and lose the entire payment history and start over. First of all, it is state law in 46 states to mandate that the rent-to-own store give you time to reinstate your payments where you left off. But, hold it, competition has taken that concept to new levels. Now, 80% of the rent-to-own industry including the major rent-to-own corporations offer lifetime reinstatement whereas as long as you can show your rent-to-own payment history in your life the rent-to-own store will give you a similar product and allow you to start at that payment history to ultimately obtain ownership. And they will allow you to go as long as your life.

Along with these new market developments within rent-to-own, there is the standard services that accompany every rent-to-own transaction: delivery and pick-up are included (Sears charges you at least $50.00), free repairs and loaners if being repaired off site during the entire rent-to-own transaction period even beyond the manufacturer’s warranty (retail does not provide that option at all), and no credit checks to be eligible. With the rent-to-own transaction, there are literally ten thousand payment options with every merchandise you rent-to-own and the customer is in full control of every one of those payment options. And, remember, the fundamental of economics. The more payments you choose when renting-to-own, the more you will pay. The less number of payments and you will pay significantly less than your credit card and close to competitive retail.

Lastly, the rent-to-own industry is regulated by 46 state laws. Each rent-to-own law mandates that the consumer be told in writing, verbally and on the price tag every penny that it will cost the customer in the entire rent-to-own transaction. Full pricing disclosures are mandated by state law and rent-to-own operators are more than happy to provide the pricing information whether by law or not. Because full disclosure and communication from the beginning avoids problems later on and since those laws have been enacted, the number of consumer complaints nationally have been less than the floral industry. An informed consumer is a happy consumer and rent-to-own operators are in the business of making happy customers.

The rent-to-own industry is in the customer service business and its recent lowering of prices, terms, and lifetime reinstatement rights are clear and present factors that warrant every consumer in America to take a new look at rent-to-own. But, do not take this written word for it. Explore yourself. Go to a rent-to-own store, or log onto their website, and make your own judgment. There is no other transaction that is as flexible, customer friendly and empowering than the rent-to-own transaction. So again, we ask each and every one of you: take a new look at rent-to-own.

Richard May is APRO Public Affairs Director. The Association of Progressive Rental Organizations is the official voice of the rent-to-own industry. Founded in 1980, APRO is the national, nonprofit trade association advocating and representing the rent-to-own industry before the U.S. Congress, state legislatures, courts, media and the public. For more information, visit www.rtohq.org.