Rental America Why the poor pay $4,150 for a $1,500 sofa

8/10/2019 Rental America Why the poor pay $4,150 for a $1,500 sofa

1/8

Rental America: Why the poor

pay $4,150 for a $1,500 sofaNo credit, no cash, no bank account? Theres still a

place to go shopping, but it comes at a price.

Donald Abbott, 35, looks over a receipt from udd!s "ome #urnishings $hile his

daughter, %avannah, and $ife &amie, rest on the famil! loveseat. The Abbott famil!

purchased a sofa set from udd!s opting to pa! for it in $eekl! installments of '(().

*+hoto b! ob iller-#or The ashington +ost/

! 0hico "arlan1ctober (2 at 452 +

CULLMAN, Ala. The love seat and sofa that Jamie Abbott cant quite afford endedu in her double!"ide trailer because of the da# earlier this #ear "hen she and herfamil# "al$ed into a ne" store called %udd#s. Abbott had no access to credit, no ban$account and little cash, but here "as a lace that catered to e&actl# those $inds ofcustomers. An#thin' could be hers. The ossibilities and the rices "ere di((#in'.
http://www.washingtonpost.com/news/storyline/wp/2014/10/16/she-bought-a-sofa-on-installment-payments-now-its-straining-her-life/http://www.washingtonpost.com/news/storyline/wp/2014/10/16/she-bought-a-sofa-on-installment-payments-now-its-straining-her-life/http://www.washingtonpost.com/people/chico-harlanhttp://1.bp.blogspot.com/-JMvHFBL6FtU/VC15LI9Px0I/AAAAAAAABko/lkHpMU8CKdQ/s1600/10565080_577895758987702_5745092814832088909_n.jpghttp://www.washingtonpost.com/people/chico-harlanhttp://www.washingtonpost.com/news/storyline/wp/2014/10/16/she-bought-a-sofa-on-installment-payments-now-its-straining-her-life/http://www.washingtonpost.com/news/storyline/wp/2014/10/16/she-bought-a-sofa-on-installment-payments-now-its-straining-her-life/


2/8

At %udd#s, a used )*!'i'ab#te, earl# model i+ad costs -,)/.*0, aid over 1* "ee$s.An Acer lato2 -,/).*0, in 1* "ee$l# installments. A Ma#ta' "asher and dr#er2-,/// over -33 "ee$s.

Abbott "anted a love seat!sofa combo, and she $ne" it mi'ht ri her bud'et. %ut this,she fi'ured, "as the cost of bein' out of otions. 45ou dont 'et somethin' li$e that 6ust

to ut more burden on #ourself,7 Abbott said.

8ive #ears into a national economic recover# that has further strained the oor"or$in' class, an entire industr# has 'ro"n around handin' them a lifeline to thematerial re"ards of middle!class life. 9etailers in the ost!:reat 9ecession #ears havebecome even more li$el# to "or$ "ith customers "ho dont have the mone# ufront,instead offerin' a "idenin' sectrum of a#ment lans that ultimatel# cost far moreand add to the burdens of life on the econom#s frin'es.

The oor toda# can sho online, a#in' in installments, or "al$ into traditionalretailers such as ;mart that no" offer in!store leasin'. The most stri$in' chan'e in the"orld of lo"!income commerce has been the roliferation of rent!to!o"n stores suchas %udd#s


3/8

066AN, A6 7 10T189 (3, :)(;4Derek land, 35, cleans furniture at udd!s "ome #urnishings in 0ullman.*+hoto b! ob iller-#or The ashington +ost/

>ts a 'rou "hose 6obLo"!>ncome Americans.7

Nobod# "ants to bu# items for amounts t"o or three times "hat the#d cost at a retailstore. %ut "hen Abbott did her shoin' in 8ebruar#, she didnt have the mone# toma$e even a small lum!sum a#ment for an#thin' of decent qualit#, even onCrai'slist. =he couldnt bu# via a la#a"a# lan @al!Mart offers that otion onl# durin'the holida# season. +erhas she could have saved u the mone# on her o"n, but"henever she has tried to do so, her stash has been "ied out to handle dail# needs.

49ent!to!o"n "as basicall# all "e could do,7 Abbott, )), said.s, not so lon' a'o, "eremore secure and better!a#in' the# could a# cash at @al!Mart and had access to

more affordable credit. %ut toda#, "ith the e&cesses of the subrime boom leadin'conventional ban$s to sta# a"a# from lo"!income borro"ers, it can be their onl#otion. Comared "ith re!recession hi'hs, the ris$iest borro"ers have been all butcut off from access to bi' loans, li$e mort'a'es, e&erts sa#.

%asicall#, the mar$et ulled bac$ from all lo"!income borro"ers instead of tr#in' tofi'ure out ho" to serve them,7 said Michael %arr, a Universit# of Michi'an la"rofessor and author of 4No =lac$2 The 8inancial Lives of


4/8

=o Abbott and her husband "al$ed into %udd#s this ast "inter, hoin' to relace theold sofa in their trailer, si& #ears old, its "irin' o$in' throu'h the bottom, cuttin''ashes into the livin' room floor.

Their decision to srin' for a ne" sofa set "as, if an#thin', a bet on the most otimisticarc for their famil#. Bonald "as 'ettin' re'ular "or$, sometimes ma$in' ?33 in a

"ee$, aid b# the load to haul ureed chic$en 'uts used for et food to factoriesacross the =outh. >f he could $ee u the ace, the#d be o$a#.

>nside %udd#s, Abbott "al$ed over to a bro"n Ashle# 8urniture model, somethin' sheand her husband a'reed "ould fit the colors of their %uccaneer trailer. The love seathad a cu!holder console in the middle and the cushions "ere lush, and "hen the#too$ turns testin' the feel, the# reali(ed it could ivot li$e a roc$in' chair.

> about died "hen > sa" that,7 Abbott said months later.

%# the ne&t da#, the Abbotts had a remade livin' room, t"o comanion ieces, both ofthe same blended material, -1 ercent leather. The love seat and sofa retailed, to'ether,for about -,?33. Abbott "ould a# for hers over t"o #ears, thou'h she still had a#in'the otion to a# monthl# or "ee$l#. The total rice if aid "ee$l#2 ,-?0.

t

is here, at the %udd#s in Cullman, "here customers first 'amble that the# can handlethe a#ments, even as the ne" "ee$l# ormonthl# installments lessen their slac$. Andit is here "here those 'ambles la# out, as customers ersist or falter in $eein' u"ith "hat the# o"e.

=ome ersist. The >raq "ar veteran "ho comes in "al$in' ast the camoufla'earmchairs and ban$ of flat!screen Ts "ith enveloes of cash. The hairdresser "hosa#s that if its a bad a# "ee$, 4> 'ive %udd#s "hat > have.7 The )1!#ear!old'randmother "ho sa#s that rett# much ever#thin' in her house comes from this store.

Most falter. At the %udd#s in Cullman, some 1? ercent of items are returned orreossessed "ithin "ee$s of the transaction, store mana'er An'ela =hutt sa#s. Andnationall#, the ercenta'e of returns has been 'raduall# tic$in' u"ard a si'n of'ro"in' stru''les for lo"er!income "or$ers, said Joe :a((o, the resident of %udd#s.

>ve never s%udd#s and its lar'er cometitors, Aarons and 9ent!A!Center, arecritici(ed b# some consumer advocates for redator# strate'ies. >tems are labeled "itha bu#!at!once 4cash rice7 and an installment rice, the "ee$l# a#ments 'iven the


5/8

lar'estt#e si(e. >n Cullman, %udd#s emlo#ees infliers 4D"n it faster for lessE7 inside the doors at trailer ar$s and 'overnment housin' comle&es.

%ut those in the industr# sa# the# offer a le'itimate service to an eas#!to!overloo$customer base. Customers "ho cant ma$e the a#ments face no enalt# because the#start out as renters, not o"ners, the# dont face debts or credit dama'e if the# ma$e a

return.

The Cullman store is one of %udd#s best erformers, and the five emlo#ees thereemathi(e "ith their customers. Bere$ %land, "ho drives around the count#reossessin' items from derelict renters, 6ust left a 6ob at +aa Johns. %rand# Ba#, oneof the sales"omen, "inces "hen tal$in' about the 6e"elr# that %udd#s $ees near there'ister. 4Ta$e a"a# a *!inch T from somebod#, thats one thin',7 Ba# sa#s. 4%ut a"eddin' rin'F7een a customer base or an econom# li$e this,7 :a((o said in a telehoneintervie" from the coman#s headquarters in Tama. 45ou ma# have five eole oenan account in a da#, but five eole return in a da#. 5ou almost become li$e a

%loc$buster.7

%udd#s raid e&ansion "as rooted in the economic crisis. As recentl# as *331,%udd#s rivate, famil#!run "as essentiall# a 8lorida!based coman#. %ut as thefirst mort'a'es startin' 'oin' bust, %udd#s sa" G,333 roducts returned over several"ee$s, :a((o said. The initial 'oal of e&ansion, :a((o said, "as less about dominationthan survival2 %udd#s "anted to 'et a"a# from 8lorida, the eicenter of the real estatebubble.

The coman# found itself "ith a thrivin' strate'# almost b# accident. Dn a @eb site forotential franchise o"ners, %udd#s sa#s that man# customers "ho had access tosubrime loans before the recession no" are 4unable to obtain traditional financin'and therefore remain "ithin the Hrent!to!o"nI customer base.7

>n *330, %udd#s had 03 stores. No" it has *3. %# *3-1 it "ants to have ?33. :a((osaid that coman# revenue is risin' at double!di'it levels annuall#, even as it contends"ith a ne" "ave of rent!to!o"n @eb sites.

The industr# as a "hole is in the bi''est fi'ht "eve had, because "e have to comete"ith ever#bod#,7 :a((o said. 4And the customer doesnt have as much mone# as the#used to.7

< dont kno$ ho$ $ell make itAbbott has sent ei'ht months no" "ith the sofa set, and some da#s, she can shru' offthe costs. =hell sin$ into the cushions 6ust before her $ids 'et out of school and sa# she


6/8

"ouldnt trade the feelin' 4for a million buc$s.7 Normal families have sofas, she sa#s,and #oull do "hat it ta$es to feel normal.

%ut other da#s, li$e this one, a recent Thursda#, the trade!offs felt more intense. >t "asa a#da#, and Bonald called a toll!free number before sunrise to see ho" much "as lefton the famil#s reaid


7/8

The# "ere eretuall# behind "ith their %udd#s installments and had ta$en tos$iin' one "ee$ and then catchin' u, "ith a ? late fee rolled in. To ma$e matters"orse, those a#ment tris to %udd#s ut them e#e to e#e "ith more temtations. Dne"ee$, the# added a smarthone to their order. Another "ee$, some =amsun' sea$ers.And suddenl#, the "ee$l# a#ments to %udd#s "ere --3.

And on "ee$s such as this, those a#ments had become unima'inable, eseciall# "iththe ?/0.// monthl# mort'a'e a#ment on their trailer.

> dont $no" ho" "ell ma$e it,7 Abbott said, and ever# solution came "ith a roblem.9eturn the sofaF =ure, but shed burn the mone# shed alread# ut into it and leave herlivin' room "ith a hole. 8ind "or$F =hes tried, but neither @al!Mart nor Jac$s northe nursin' home cafeteria have sho"n interest in an alicant "ith soriasis and aninth!'rade education.


8/8

%# midda# that Thursda#, ?- of the *)3 had alread# vanished, used for 'as andci'arettes, and Abbott headed to @al!Mart loo$in' to send as little as ossible on'roceries. =he 'rabbed a -*!ac$ of ramen, some hot!do' buns and bumed into afriend, 9achel %r#ant, in the "ant this, >m 'oin' to 'et it. %ut 'ro"in'u havin' the chair, the recliner, the love seat, the couch and ever#thin', #ou 6ust 'etused to the normal stuff. =ometimes its hard to brea$ from the normal stuff and 'et torealit#.7

Documents

Rental America Why the poor pay $4,150 for a $1,500 sofa