We’ve all heard about Afterpay, a “buy now, pay later” that promises convenience for shoppers and a sales boost for businesses. But not every tale is a happy one. Meet Jiyat Sachdeva, the brains behind a Sydney-based online sneaker shop called Sole AU. He signed up with Afterpay thinking it would make his business soar; instead, it turned into a five-month-long battle to get his hands on $83,000 he’d earned.
When Sachdeva joined Afterpay in May, they promised him the money from his sales in 1 to 5 days. Four months later, though, his $83k was still being held hostage by Afterpay (just as we’ve seen Amazon and Etsy do). The culprit? A clause in the merchant’s agreement, which allowed Afterpay to hold a “rolling reserve” if they see a higher risk. Sachdeva argued that his 6.2% return rate, just over Afterpay’s 5% threshold, wasn’t a valid reason to keep his money.
He stood his ground, saying that all his shoes were sourced directly from manufacturers or authorized resellers…no chargebacks, disputes, or direct debit failed to report. But Afterpay wouldn’t budge. Despite their claims of risk reduction, Sachdeva saw it as a scam and a frustrating roadblock to getting what’s rightfully his.
Sachdeva’s saga isn’t an isolated issue. It shines a light on a bigger problem in the “buy now, pay later” world. Despite their popularity, Afterpay and other BNPLs are having an issue making money. In 2021, Afterpay reported big losses, mostly because of bad debts. That’s raised questions about the whole industry’s sustainability and profit-making potential.
The saga deepens with the story of OpenPay, the first BNPL service to crumble, and the rollercoaster financial ride of companies like Zip. Now, there’s talk of tightening the rules for the BNPL sector. They’re even considering bringing it under the Credit Act. That could impact not just businesses like Sole AU, but also shoppers and everyone else in the game.
The drama that Sachdeva faced is a reality check – it shows how tricky online retail can be and how uncertain the BNPL scene is. While Afterpay has improved sales for businesses like Sole AU, it’s clear there are some issues. The wider issues affecting the BNPL world could reshape the whole online shopping scene.
Whether you’re a shopper or a shop owner, understanding the rules of these BNPL deals is key. And keep an eye on the changing rules – they could affect how businesses work and how shoppers use these services. If you’re running a small business, you should look into other ways to stay financially safe and keep your online hustle running smoothly. A little caution can go a long way.
Yours Truly,
The Instant Refund Expert
The Refunds Blog 