IKEA launches an interest free financing for bigger purchases
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Breakfast Business with Enterprise Ireland on Newstalk. December and early January are usually the busiest period for furniture sales. Many of us like new stuff for Christmas and others like to refresh our homes during the winter sales. One of the biggest furniture retailers is, of course, IKEA. And now they've launched an interest fee financing for bigger purchases.
What financing options has IKEA introduced for bigger purchases?
But should we be encouraging shoppers to take out money on credit, even if the rate is 0%? Callum Levy is the Country Service Experience Lead with IKEA UK and Ireland and is on the line. Good morning, Callum. Morning, Joe. Thanks for having us. Tell us a little bit about how the 0% credit works for customers.
Yeah, so at IKEA, we believe home should be a place of joy, not stress. We have a life at home report. We've asked thousands of customers what is important for them at home, and it shows 36% of people delay improvements because of cost. That's why we've introduced a new 0% APR interest-free payment plan with Hum Finance.
So it's Hum you do the deal with. In other words, someone signs up with Hum and they get the financing by you guys.
That's right. Customers can spread the cost from €99 to €15,000 over up to 48 months. There's no commission, no upfront deposit, and it's about removing barriers so more people in Ireland can enjoy the home that they truly deserve.
Okay, so did you say 99 euros is the smallest amount you can put on finance?
Yeah, so it's 99 euros up to 15,000 euros over flexible terms from three to 48 months, all at 0% APR, no commission or upfront deposit. It's a transparent, responsible way to make home improvements more affordable. It's ideal for medium to high value purchases like kitchens, bedrooms and living rooms. Big projects like that that really impact life at home. But it's also available for smaller purchases starting at 99 euros. So customers really have the flexibility no matter what their needs are.
And how does it work financially between you and Hum who provide the credit? I mean, they're not going to do it for free.
Yeah, absolutely not. Hum charges a merchant fee for providing the service and the service is fully taken by Hum Finance. So customers can apply online or in-store and approval is quick. Full details are at ikea.ie forward slash finance. And of course, we also encourage customers to use our joyful Home Journey Guide, which offers budgeting tips, and self-reflection questions to make financially mindful decisions.
Now, this sounds to me like it's only of use to the already fairly well-off. You're not going to give credit to people whose credit is not great.
Absolutely. We are really committed to being financially responsible. There is a robust process to ensure that we are financially responsible and lending in a responsible way. And customers need to apply online or in store by email. by giving several details like driver's license or passports, proof of address, and further details of full credit checks required to get the payments.
How does IKEA's 0% APR financing plan work for customers?
So the people who have the money can benefit again with the zero interest rate. Now, what happens if the European Central Bank raises interest rates next year? As many market commentators think they will, will the zero percent rate be maintained?
Absolutely. We are fully committed to launching this product, and it's available now, so we're really excited for customers to be able to use this product to support their dreams at home.
Okay, so even if interest rates go back up to 4%, you're still going to stick with the 0%? Yes, absolutely. How's business?
Business is good. It's really strong in Ireland and we're really committed to continued growth and investment. Over the past couple of years, we've invested significantly in Ireland. We've expanded our physical presence in Ireland. On top of Ballymun and Carrickmine stores that we have, we've now got seven plan and order points. And we included our new opening in Waterford, which opened in July this year. That's the largest store outside Dublin, which also has a dedicated click and collect service.
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