According to Salon Today, Americans are spending more in the salon than ever before. Despite this growth, the steep price of hair extensions and multi-appointment coloring services can deter many would-be clients—and defer a lot of potential revenue from your salon. Flexible payment solutions such as the newly-released Vagaro Pay Later feature enable salons to capitalize on their industry’s growth and generate more bookings & retail sales without putting the squeeze on clients’ wallets.
Vagaro Pay Later powered by Certegy, is an example of the Buy-Now, Pay-Later payment model that has become increasingly popular in recent years. It gives clients the financial flexibility to afford the pricier services they normally wouldn’t be able to in four interest-free installments. The VPL Split-Pay option adds yet another layer of convenience for buyers by letting them split their payment between their credit card and Vagaro Pay Later.
You’ll effectively enable more people to feel beautiful and glamorous—guilt-free—while earning more money in the process. We call that a win-win.
Below, we’ll break down the benefits of Buy-Now, Pay-Later, and explore how Vagaro’s latest feature can facilitate higher sales numbers for your salon.
How Does Vagaro Pay Later Work?
To answer this question, we should first define the Buy-Now, Pay-Later (BNPL) payment model.
Buy-Now, Pay-Later (BNPL)
BNPL divides a (typically large) purchase into a series of equal payments (typically four), the first of which is made at checkout. Businesses are paid in full upfront and the BNPL provider carries the risk, making BNPL particularly attractive to small businesses. In 2022, BNPL payments grew at a rate of 66.5% in the U.S. alone. Salons on the Vagaro platform are poised to take advantage of this growth.
Vagaro Pay Later
Vagaro Pay Later seamlessly integrates into the rest of your Vagaro salon software & apps. It can be applied to anything you sell and works with both online and in-store purchases.
When clients opt to use Vagaro Pay Later, they agree to make four interest-free payments over six weeks. This equates to one payment automatically charged every two weeks, or, around every pay day for most people.
For context, let's use the example of professional hair extensions that cost $800. When a qualifying client selects Vagaro Pay Later as their payment option, your salon receives the funds right away. The client pays $200 at checkout, followed by three additional $200 payments. Simple math, right? All installments are automatically withdrawn from a client’s linked bank account.
Ways Vagaro Pay Later Can Benefit Your Salon
The benefits of Vagaro Pay Later are obvious for clients, but what about the growth of your business? Well...
It Helps You Sell Higher-Value Services
Offering a BNPL service like Vagaro Pay Later enables clients to afford more luxurious services by easing their financial burden. That means booking more:
Color services
- Color Corrections
- Blonding Services
- Balayages
Hair Extensions
- Keratin Tip
- Hand-tied Wefts
- Sew-in Wefts
Skin & Nail services
- Microneedling Facials & Chemical Peels
- Luxury manicures & pedicures
Why this uptick in big sales? Having the agreed-upon amount deducted on payday enables clients to budget accordingly for purchases that otherwise do not fit into their immediate budget.
It Adds Flexible Payment Options
Vagaro Pay Later’s Credit Card Split-Pay feature stretches payment flexibility even further, enabling clients to split payment between their credit card and VPL at checkout if needed for an even easier, more manageable payment option. This is especially useful if a transaction exceeds the VPL maximum limit of $1,500.
Payment can also be split between VPL, cash, gift card or check.
It Increases Your Reach
Offering Vagaro Pay Later can bring in scores of new customers from different demographics. Buy Now, Pay Later is particularly popular among Millennial and Gen Z shoppers, especially since it does not require a hard credit check. After easy budgeting, respondents to that same Ascent survey above cited the lack of credit checks and interest-free payments as the main reasons they use BNPL.
And, Millennials outspend any other generation in the salon. Who comes in second place? Gen Z. We sense a lucrative opportunity here, and we’re enabling Vagaro businesses to run with it.
It Improves Customer Experience & Retention
Vagaro Pay Later gives clients more choice and control over their payment options. As a BNPL service, it also offers a simple, straightforward and frictionless payment process. These are the ingredients for an elevated client experience, the kind that keeps them coming back.
It Improves Conversion Rates
**F**lexible BNPL options, like Vagaro Pay Later, can remove the specter of buyer’s remorse. This means fewer abandoned shopping carts and an increased likelihood that clients will follow through when booking services online. In fact, some numbers point to a 30% conversion rate on average for businesses with BNPL platforms.
It Increases Average Order Values
Businesses can increase average order values (AOV) by 30% to 50% when they use BNPL over other payment methods, according to CNBC. The lesson: When people know that they can rely on flexible payment options, they are likely to spend more on additional services and package upgrades. That means you can more easily upgrade a client’s coloring service with highlights, lowlights, or a gloss. Or, it could open the door to upselling conditioning, texturing or smoothing services. Clients may also be less shy about splurging on luxury beauty products.
Pro tip: Be sure that you introduce the Vagaro Pay Later option as early in the sales conversation as possible!
How to Get Started with Vagaro Pay Later
Setting up Vagaro Pay Later is straightforward. The VPL approval process for Vagaro businesses takes four business days. When approved, existing Vagaro businesses will find the feature in the “Add-Ons” section of their software. Simply select activate, then set the min/max price limits. Accept VPL payments for everything you sell, including products, services & packages. Enjoy the flexibility of applying repayment plans to both online and in-house checkouts. New customers who sign up for Vagaro Merchant Services will be enrolled automatically into VPL.
Clients who choose the Pay Later option must also get approved to use it, though this process is fairly quick. To sign up, they simply find the VPL option in their Vagaro profile, accept the terms and conditions and input their bank account information.
Check out this helpful article for more in-depth information on how to set up Vagaro Pay Later.
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Driven by celebrities, social media trends, the ubiquitous world of high fashion and the eternal quest for beauty, people are spending a lot more time & money in the salon.
Buy Now, Pay Later use has skyrocketed in the last several years, concurrent with the salon industry’s significant growth. Seamlessly integrated into the rest of the Vagaro software, Vagaro Pay Later will enable salons to sell more high-value services and increase overall sales conversions with no financial risk to them. Don’t leave so much potential revenue on the table. Start using Vagaro today!
