1 in 4 Americans Regret Their BNPL Purchase: Retailers May Be Partly Responsible

Buy Now Pay Later (BNPL) has a customer problem — and merchants play a bigger role than they may realize.

According to The Motley Fool's 2025 Buy Now, Pay Later Trends Study, roughly one in four Americans regret using BNPL, and 29 percent have made late payments. A growing number of shoppers are juggling multiple plans at once and losing track of what they owe.

Most discussion has focused on the consumer side of this issue. But there's a less-examined angle: merchants may be inadvertently making it worse.

The way retailers design installment options at checkout — which products surface first, how fees are disclosed, which options appear by default — directly shapes which products shoppers end up using. Right now, most retailers are optimizing for basket size and conversion. They're not measuring what happens six weeks later, when the final payment comes due. Few are tracking return rates, customer service volume, or repeat purchase behavior by payment method. Those numbers would tell a different story.

This matters to the finance team, not just the marketing team. Retail CFOs tracking customer lifetime value are starting to ask harder questions about BNPL, specifically whether the checkout conversion lift is worth the downstream costs of returns, missed payments, and lost customers. The answer depends heavily on which product you're offering.

The distinction is simple. Most BNPL products issue new debt for each transaction. The consumer opens a new line of credit, often without fully registering it, and that obligation sits outside their existing financial picture. Card-linked installments work differently: consumers pay using credit they already have, without taking on new debt, a new application, or another balance to track.

That difference shows up in the data. According to Splitit merchant feedback, card-linked installments achieve approval rates above 85 percent, compared to a 35 to 40 percent industry average for traditional BNPL. Splitit merchants have reported up to a 20 percent lift in average order value and a 78 percent increase in cart conversion. A 2024 study conducted by Splitit and PYMNTS Intelligence found that consumers spend twice as much when using their existing credit card for interest-free installments as they do with traditional BNPL — and that 37 percent of merchants offer card-linked installments, up 16 percentage points over the prior six months.

Getting Started

Before selecting a platform, audit your current checkout. Which installment options appear by default? What are your return rates by payment method? Do you have visibility into repeat purchase rates segmented by how a customer paid on their first purchase? Most merchants don't have clean answers to those questions. That's the problem worth solving first.

Once you know where you stand, evaluate platforms against the metrics that matter to your business — approval rates, network acceptance, and how cleanly the solution integrates with your existing checkout. Then launch, measure, and adjust. The ROI case becomes clearest over time, in CLV and repeat business, not just the first transaction. Merchants who have made that shift report something beyond the conversion numbers: customers who come back, and who trust the brand more because the checkout didn't put them in a difficult spot.

Retailers who get this right aren't just reducing friction at checkout. They're building the kind of customer relationships that hold up over time. That starts with giving shoppers a way to pay using the credit they already have.

Nandan Sheth is the Chief Executive Officer of Splitit, a global fintech company that enables consumers to make purchases in interest-free installments using their existing credit cards.