learn how to define the best option for your business – WAU

Defining which purchase option to offer to your consumer is a very common question for any business. But the decision between installment and cash sales is not so simple and you need to take some factors into account to make the best decision for your company.

A very common question for those who run a business, be it a physical store or an e-commerce, is the form of payment to be made available to their customers. Sale in installments or in cash, for example, is a very common question.

This decision, however, is not so simple to make and several factors must be considered.

After all, payment methods can directly influence the consumer’s shopping journey. Therefore, choosing which options to make available to your customers is much more complex than just deciding on the best rates or conditions for your business: you need to consider user experience.

Do you want to know, then, how to make the right choice and define the ideal payment method for your company? Continue reading this article to understand the importance of analyzing your market and what are the advantages and disadvantages when choosing installment or cash sales.

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What is the importance of knowing the market?

When starting a business, one of the first tasks is to carry out an analysis of the competition and, of course, a study of the market in which it operates. When it comes to payment methods, the process must be exactly the same. It is no use just focusing on the best conditions for your company and ignoring external factors.

Therefore, understand how your competitors behave in the market, that is, if they usually offer sales in installments or in cash to the target audience that you are going to dispute, for example. After all, there is no point in offering a product or service with the best cost-benefit ratio, but moving the customer away when finalizing the sale.

Analyzing consumer behavior is also another important way of determining what payment methods you will offer in your business. Often, the market in which you operate acts in the same way for a long time, but the customer is not satisfied.

That is, you can identify a demand – not met – from the consumer and, thus, generate a differential for your business simply by offering a different method than your competition is used to, making it even an advertising tool.

In addition, it is essential to also analyze the internal scenario, that is, the conditions that your company has to support, for example, the payment terms or even the impacts of a cash sale on the cash flow. After all, each of these payment methods has its advantages and disadvantages, exactly what we are going to present next.

What are the benefits and negative factors of installment sales?

According to a survey by the London Association of Credit Card Companies and Services (Abecs) conducted in 2017, the use of credit cards in London generated more than R $ 840 billion, with just over 70% of these operations in installments, in an average of five installments per purchase, according to a study by the Credit Protection Service (SPC Brasil).

That is, it is a payment method that has become very common in the country and, therefore, you should consider offering it to your customers. To help you with this task, we have listed what are the benefits and negative factors of installment sales and also how to be secure when choosing this method.


The main advantage for those who offer payment in installments is precisely the possibility to attract more customers. After all, certain products can be expensive for your consumer when demanding payment in a single installment, however, they can become viable if the installment is allowed.

Loyalty is also another advantage, since you create a closer and more trusting relationship with your consumer. Another benefit is the possibility of offering guarantees of long-term receivables, making negotiations with suppliers, for example, easier.

Negative factors

When we talk about payment in installments, the negative factor that most frightens managers is default – which, in London, according to the same study by Abecs, reaches 5.2%. Furthermore, without financial organization, the company that accepts this payment method may wind up with cash flow, for example.

It is no use just worrying about attracting new customers and ignoring the problems that may arise when making payment in installments as an option. The fee charged by credit card operators is also a factor to be analyzed within this decision process.

Is it possible to have security selling in installments?

Therefore, in order to have security selling in installments, it is important to take into account some factors. Create a team responsible for the credit analysis of your customers it is a way to increase security by offering this payment method, avoiding consumers who have a history of not meeting their debts, for example.

With experienced professionals, you can plan contracts that further protect your business. Requiring payment guarantees and fines in the event of default, for example, you also strengthen your reputation in the event of a lawsuit, showing your concern for security too.

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What are the advantages and disadvantages of cash sales?

Receiving the total value of a sale in a single installment is the dream of any administrator. In London, it is still a reality for most companies, mainly in e-commerce, which, according to information from the 37th Webshoppers report, had 49.8% of its purchases paid off in a single installment.

However, there are some precautions to be taken when choosing this payment method for your customers. We separate the advantages and disadvantages and also analyze whether or not it is worth using a very common strategy of offering a discount at the time of payment. Check out!


The main advantage of cash payment is in the increase in short-term revenues, allowing your company to organize itself, for example, to make new investments or even pay off debts with a supplier. Thus, your planning can be done more efficiently.

With financial organization and cash sales, you can avoid the need for loans, for example. This allows your company create a financial reserve for any emergencies and in some cases, it can attract more customers by offering a percentage discount.


An issue with offering only that payment method can be avoid a conversion due to a high value. After all, many customers may not be able to make a cash payment and, for this reason alone, will look for a competitor that offers the possibility of payment in installments.

In addition, if you do not carry out adequate financial planning, cash payment can be a problem for the future, since you will have all the money at once and may end up compromising the company’s next obligations.

Is it worth giving a discount on the cash payment?

An advantage of making cash payments available to your consumers is the possibility of generating more sales by offering a discount. It is a very common practice: according to the SPC study, 57% of customers received a discount proposal if they paid in bank slip, debit or credit card in a single installment.

However, to determine whether this discount can be positive for your business, you need to analyze the whole context of your company. After all, there is no point in attracting more customers thanks to a discount, but not being able to generate the necessary amount to pay your expenses or make investments.

The discount can be offered, for example, at certain times of the year when there is a drop in sales or even to prevent a product from not taking up space in your inventory.

Which strategy to adopt: installment sale or cash?

When deciding between installment and cash sales, your focus should be on align the best conditions for your business and, of course, practicality and convenience for the consumer. Instead of refusing to sell on credit for fear of default, find ways to increase the security of this method.

The same goes for discounts offered for cash payments. Do not offer discounts without planning behind and only offer what will not hinder your company’s finances. A good measure is when this strategy results in other gains, either in the sale of a product that was not so successful or to improve results in a low month.

The context needs to be analyzed so that your final decision finds a common denominator between your company’s success and consumer satisfaction. Therefore, consider your business’s billing and financial health and, of course, the flexibility to make conversion numbers higher.

Now that you know what to consider in order to make sales in installments or cash available to your customers, how about knowing another strategy that can help you sell more? Get to know Hacking Sales and find out how you can boost your sales!