Buy Now, Pay Later for Retailers: How to Offer BNPL and Grow Sales

A shopper finds exactly what they want. The jacket they've been looking for. The necklace that completes their look. The custom furniture set for their space. Then they hit the moment (of hesitation) that makes or breaks the sale: the cart total.

That hesitation is what Buy Now, Pay Later for retailers is built for. These are shoppers who want the item. They just do not always want to pay the full amount all at once. Empower says about 90 million Americans were expected to use BNPL in 2025, and average monthly BNPL spending rose almost 21% from June 2024 to June 2025. Capital One Shopping Research also says BNPL can drive an 85% higher average order value than other payment methods, and up to 40% of BNPL sales can come from new customers.

For independent and specialty retailers, BNPL can help turn that pause into a purchase. It gives customers more flexible payment options while helping merchants get paid upfront by the provider. That can mean higher average order value, less checkout hesitation, and more completed sales.

That value isn't limited only to e-commerce carts. Many specialty retail purchases are made via digital invoices or checkout links sent directly to the customer, especially for custom, bespoke, and higher-ticket items. That makes FreshBooks more than just a back-end record-keeper. It becomes an integral part of the actual BNPL sales flow.

🌟 KEY TAKEAWAYS

Buy Now, Pay Later for retailers can increase average order value, attract new customers, and improve checkout conversion by giving shoppers more flexible payment options.

BNPL lets customers shop freely and check out without hesitation, while the provider manages the repayment plan, and the retailer receives funds upfront (minus merchant fees).

For e-commerce, BNPL works best when it surfaces before checkout friction hits.

FreshBooks can help you keep BNPL-powered retail operations clean by tracking payments, payouts, invoices, and cash flow after the sale.

What is BNPL for retailers?

For retailers, Buy Now, Pay Later is a payment method that lets customers purchase products now and repay over time through installment plans or monthly payments, depending on the provider, purchase amount, and eligibility.

In a standard e-commerce setup, this typically occurs during online checkout. But for many specialty retailers, the sales flow looks different. Instead of a typical cart-only experience, the merchant may send a direct invoice or checkout link for a custom order, a boutique item, a made-to-order piece, or another high-ticket purchase.

For merchants already using FreshBooks Payments, BNPL can be offered directly through the FreshBooks invoice flow. So instead of treating BNPL as something that belongs only in a traditional e-commerce CMS, retailers can also use it as a selling tool within the invoice or estimate experience they already use with customers.

The opportunity is not just to offer BNPL somewhere. It is to offer it in the moment and in the format that best matches how you actually sell.

How BNPL works for retailers

There are two common ways retailers use BNPL:

Standard e-commerce checkout

The customer shops online, adds items to cart, reaches checkout, and selects a BNPL option if available.

FreshBooks invoice or checkout link workflow

This workflow is especially useful for specialty retail. A merchant sends the customer a digital invoice or checkout link for a custom, bespoke, or higher-ticket purchase. The customer then selects the BNPL option directly from that invoice flow.

From there, the model works the same way:

That makes BNPL flexible enough to support both high-volume e-commerce and more consultative, specialty retail sales.

The customer shops online, adds items to cart, reaches checkout, and selects a BNPL option if available.

BNPL vs. layaway vs. store credit: what’s the difference?

Retailers have offered deferred payment in different forms for decades. They are not all created equal.

Capital One explains layaway as a system where the store holds the item until the shopper pays in full. That means the customer doesn't take the item home right away. BNPL flips that model. The customer gets the purchase immediately, and the merchant is generally not stuck managing the repayment relationship.

That's why BNPL tends to outperform layaway in e-commerce. It matches how online shoppers want to buy: fast, digital, and immediate.

Why independent retailers should offer BNPL

For retailers, BNPL works best when it’s treated as a selling tool, not just a payment method. It helps reduce upfront pressure for the customer while allowing the retailer to present premium, bespoke, or higher-ticket purchases in a way that feels more manageable.

That matters in specialty retail, where the path to purchase is not always a standard e-commerce cart. Whether the sale happens on a product page, at checkout, or through a direct invoice for a custom order, BNPL can help the customer move forward with more confidence.

It helps you sell the purchase the customer actually wants

For specialty retail, the challenge is often not interest. It's upfront affordability. BNPL helps reduce that friction so customers can move forward with the premium, custom, or higher-ticket item they came in for instead of trading down or walking away.

It works especially well for bespoke and boutique sales

Not every retail sale runs through a standard e-commerce cart. Specialty retailers often sell through direct conversations, custom orders, curated recommendations, or made-to-order products. In those cases, sending a FreshBooks invoice with BNPL built in is a much more natural workflow than forcing the sale through a traditional storefront experience.

It gives you a stronger sales tool, not just a payment feature

Actively pitching BNPL, not just enabling it quietly in the background, is important. Especially in retail, where the right language can help a shopper feel more comfortable completing a purchase.

Which retail categories benefit most from BNPL?

BNPL is most powerful when the purchase price creates hesitation, but the desire is already there.

Fashion and apparel boutiques

Fashion has long been a natural BNPL category. Afterpay (a FreshBooks partner) positions itself heavily around fashion-friendly shopping behavior, and BNPL works well when shoppers are deciding between a basic option and a fuller cart.

Jewelry stores

Jewelry is often emotional, gift-driven, and higher-ticket. That makes installment plans especially useful when the shopper wants the piece now but prefers to spread the cost out over time.

Furniture and home décor

Affirm (a FreshBooks partner) emphasizes “consideration accelerators” that help shoppers fit larger purchases into their budgets, including prequalification and dynamic payment messaging. That makes furniture, home décor, and other considered purchases especially strong use cases.

Sporting goods and outdoor gear

Affirm also highlights fitness and sporting goods as a tailored retail solution, which makes sense for bikes, kayaks, skis, and other gear with high average order values and strong “buy now, use now” motivation.

Specialty gift, beauty, and lifestyle retail

Any category where shoppers are aspirational, comparison shop, or build a cart can benefit from greater payment flexibility at checkout.

How to integrate BNPL into your retail store

The most effective BNPL setup is the one that matches how you already sell. For some retailers, that means offering it directly in e-commerce checkout. For others, especially those selling premium, custom, or made-to-order items, it means presenting the item via a FreshBooks invoice or checkout link.

What matters most is not just where BNPL appears, but how early it’s introduced. The earlier customers understand that flexible payments are available, the easier it is to reduce hesitation before price becomes a blocker.

1. Match BNPL to how you actually sell

If most of your sales are made through a standard online store, your BNPL setup may be in your e-commerce checkout.

But if you sell premium, bespoke, custom, or boutique items through direct customer conversations, FreshBooks invoices are a better place to present BNPL.

2. Use BNPL before the shopper walks away

Do not wait until the customer has already decided that the total feels too high. Bring BNPL payment flexibility into the conversation earlier, especially on higher-ticket or made-to-order purchases.

3. Make FreshBooks part of the workflow

For merchants already using FreshBooks Payments, the goal is not just awareness. It's adoption. That means actually using the BNPL option built into the FreshBooks invoice flow, where it makes sense.

How to position BNPL to your customers

The most effective BNPL messaging is simple: help the customer say yes with less upfront pressure.

Whether someone is checking out on your website or reviewing a direct invoice for a boutique or custom purchase, the shopper-facing value stays the same:

The workflow might change, but the positioning does not.

Core positioning

BNPL should be positioned as:

When retailers position BNPL well, they aren’t pushing financing. They’re removing friction, preserving confidence, and helping the customer buy in the way that works best for them.

Talk tracks retailers can use

You don’t need to reinvent the wheel every time the topic comes up. A few ready-made scripts make it easy to introduce the option naturally.

General retail talk track

“If you’d prefer not to pay the full amount today, you can choose the flexible payment option at checkout and split the cost into smaller payments."

Premium purchase talk track

“If you’re looking at one of our premium items today, you can select the flexible payment option at checkout to split the cost. It’s a great way to manage your budget while getting exactly what you want.”

Custom or bespoke purchase talk track

“For custom purchases like this, we can send you a digital invoice with a flexible payment option built in, so you can move forward without having to pay the full amount upfront.”

Budget-conscious shopper talk track

“If the total feels a little higher than you planned for today, you can break it into smaller payments at checkout rather than paying everything at once.

Upsell or trade-up talk track

“If you’d rather go with the version you really want, the flexible payment option can make that easier by spreading the cost out over time.”

Objection-hander for retailers

Customer: “I think I’ll hold off. I don’t want to put a large purchase on my credit card right now.”

Merchant: “You don’t have to use a credit card. Our checkout offers a transparent installment plan that lets you split the cost with no hidden fees, so you can take it home today and manage your cash flow on your own terms.”

Customer: “I should probably wait until next month.”

Merchant: “That makes sense. The flexible payment option is there for exactly that reason. It lets you move forward now without taking the full hit all at once.”

Customer: “I’m worried this is going to come with extra fees.”

Merchant: “The terms are shown clearly at checkout, so you can review the payment schedule before you decide. The goal is to give you a more manageable way to pay, not surprise you later.”

Customer: “I only came in for the basic option.”

Merchant: “Totally fair. If the upgraded option is the one you really want, flexible payments can make it easier to choose the better fit without paying the full amount upfront today.”

Customer: “I need more time to think about it.”

Merchant: “Of course. Just keep in mind that if upfront cost is the main concern, the flexible payment option is available to make the purchase feel more manageable.”

The goal is not to over-explain BNPL. It is to present it clearly, confidently, and early enough in the buying journey that the customer sees a path forward before hesitation turns into abandonment.

FreshBooks also has a dedicated page explaining how Buy Now, Pay Later worksthat you can share directly with your clients. It answers common questions and lets them get pre-approved with providers before you even send an invoice.

Is BNPL right for your retail business?

The best reason for retailers to offer Buy Now, Pay Later is not trendiness. It is leverage.

It gives your customers more ways to pay, helps them complete purchases they already want to make, and can drive more sales, attract new customers, and boost average order value. For you, it means upfront funds, less repayment risk, and a cleaner checkout story.

If your e-commerce store sells products people want now but prefer not to pay in full today, BNPL is the solution. For items you need to invoice customers for, FreshBooks BNPL workflow makes it simple and clear.

Frequently asked questions

How much does it cost a retailer to offer BNPL?

The cost to a retailer of offering BNPL depends on the provider, transaction type, and agreement. In FreshBooks, invoice BNPL pricing with Affirm at 6% + $0.30 per transaction, while retail checkout providers typically use their own merchant fee models. The right comparison is not fee versus no fee. It is fee versus lost sales, lower AOV, and weaker conversion.

Does BNPL work for in-store retail, not just e-commerce?

BNPL does work for in-store retail, not just e-commerce. Afterpay offers in-store experiences and says shoppers can use its digital card in person, where supported.

Which BNPL provider is best for small independent retailers?

The best BNPL provider for small independent retailers depends on your average order value, customer demographics, and checkout flow. Afterpay is built for everyday retail and fashion, and Affirm is built for larger or more considered purchases. FreshBooks offers both options and serves as the finance and reconciliation layer, helping you keep sales, payouts, and cash flow organized.

Is BNPL better than layaway for my retail store?

BNPL is often better than layaway for a retail store when speed and e-commerce conversion matter. With layaway, the customer does not receive the item until the final payment is made. With BNPL, the customer receives the item immediately, and the merchant is usually paid up front.

Does BNPL affect a customer’s credit score?

BNPL can affect a customer’s credit profile depending on the provider and plan. Afterpay and Affirm conduct soft credit checks for new customers, which do not affect credit scores.

Are BNPL plans always interest-free?

BNPL plans are not always interest-free. Pay-in-4 products are often interest-free, but longer financing options may include APRs, finance charges, or other terms depending on the provider, the purchase, and the lender. Some arrangements are provided or arranged under lender terms, and offers can vary across lenders*.

Affirm disclaimers

*Payment options through Affirm are subject to an eligibility check, may not be available everywhere, and are provided by these lending partners: affirm.com/lenders. For Affirm Terms of Service, please visit https://stripe.com/legal/affirm 

Canada residents: "Payment options through Affirm Canada Holdings Ltd. (“Affirm”) are subject to an eligibility check, and depend on purchase amount, payment terms, vary by merchant, and may not be available in all provinces/territories. Minimum purchase and down payment may be required.

Afterpay disclaimers

Late fees may apply. Eligibility criteria apply. See www.afterpay.com for more details. Loans to California residents made or arranged pursuant to a California Finance Lenders Law license. 2025 Afterpay US ©.

*You must be 18 or older, a resident of the U.S., and meet additional eligibility criteria to qualify. Loans through the Afterpay Pay Monthly program are underwritten and issued by the First Electronic Bank. A down payment may be required. APRs range from 0.00% to 35.99%, depending on eligibility and merchant. For example, a 12-month $1,000 loan with a 21% APR would have 11 monthly payments of $93.11 and 1 payment of $93.19, for a total of $1,117.40. Loans are subject to credit check and approval and are not available in all states. Valid debit card and acceptance of final terms required to apply. Estimated payment amounts shown on product pages exclude taxes and shipping charges, which are added at checkout. See here for complete terms.

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