Late fee and debt risk warnings absent as major retailers bombard online shoppers with Buy Now Pay Later, Which? investigation reveals

Online shoppers are being bombarded with Buy Now Pay Later (BNPL) payment options at the checkout, often with little or no information about late fees, credit checks and the risk of falling into debt, a Which? investigation of more than 100 major retailers has found.

Which? looked at 111 of the biggest online retailers in fashion, baby and child, and homewares to find out how they present BNPL as shoppers browse a site and make a purchase. These sectors were of particular interest as previous research from the consumer champion found that experiencing a major life event – such as having a baby or moving home – increases the odds of using BNPL by around a third.

BNPL products are rapidly rising in popularity, offering convenience to shoppers at the checkout by allowing them to pay for items in 30 days or weekly instalments, interest free.

More than half (62 out of 111) of the online retailers Which? analysed offered at least one BNPL scheme at the checkout, and nearly 70 per cent of those that offered a pay later service had more than one option available. JD Sports offered the most schemes, listing six options at the checkout including Klarna pay in 30 days, Klarna pay in 3, Clearpay, Laybuy, Openpay and Zip.

Of the retailers that offered BNPL, nearly nine in 10 (87%) promoted the schemes on their product pages, while three in 10 (30%) featured ads for BNPL on their homepages. An expert in Marketing and Behavioural Sciences told Which? these promotions can encourage shoppers to buy more and that reframing a large expense as a small daily or monthly expense can distort how we understand the cost of a product.

Which? found nine retailers, the majority of which sell baby and childrens products, that did not include any information at all about late fees on their checkout, product listing or BNPL explainer pages for certain BNPL providers. These retailers include Baby and Child Store, Bella Baby, Cosatto, Footasylum, Huggle, Kiddies Kingdom and Natural Baby Shower.

Failing to clearly communicate the risks of using a BNPL scheme could land customers with unexpected fees. It could also leave them unaware of some of the potential consequences of failing to keep up payments – which can mark your credit report, impact your credit score, or even see you referred to a debt collector.

Klarna, Laybuy and Clearpay – the three largest BNPL providers – have guidelines they share with retailers on how their products should be presented, but Which? found some retailers were not adhering to them.

At the time of the research, Klarna’s advertising guidelines said the following risk warning should always be used: “Please spend responsibility. Borrowing more than you can afford could seriously affect your financial status. Make sure you can afford your monthly repayments on time.”

However, Which? could not find this exact wording on the sites of 23 retailers including Asos, Wayfair, Halfords, Gymshark, Nike and Footasylum. Though some retailers, including Asos, used similar warnings, others only warned that missing repayments could affect your ability to use Klarna again.

Klarna has since updated the risk warning in its guidelines with different wording and is in the process of communicating this to retailers.

One online shopper told Which? he felt bombarded with different BNPL options when shopping for even relatively inexpensive items. He said: “I felt I was being pushed into using a BNPL scheme. I can see why people end up struggling. It shocks me how predominant the BNPL message is.”

Despite this, he did find himself paying with Klarna when purchasing a desk from Wayfair during lockdown: “Afterwards I thought to myself, ‘why did I bother selecting Klarna?’ It wasn’t an affordability issue – I could have paid the full amount, job done.”

After he had paid, the shopper realised he had not read the T&Cs properly and was concerned about his credit score. He added: “I suddenly wondered what it would do to my credit rating. Paying with Klarna was definitely an impulse decision when clicking through the checkout.”

The Financial Conduct Authority’s Woolard Review, published earlier this year, expressed concerns around how BNPL schemes are presented at checkouts and called for the urgent regulation of the BNPL market. However, HM Treasury plans for BNPL regulation are yet to materialise.

Which? believes there must be no further delay for the regulation of the BNPL market to ensure greater transparency on fees, credit checks and repayments on retailers’ websites so that customers who are using the schemes for the first time are clear on the risks and how they work.

Gareth Shaw, Which? Head of Money, said:

“While BNPL services offer convenience at the checkout, our research shows that online shoppers are being bombarded with these schemes at the biggest retailers, often with no information or warnings about the risks of late fees or getting into debt. Failing to communicate these risks could land customers with unexpected charges or impacted credit scores.

“This demonstrates why there should be no further delay to plans for BNPL regulation, which should include much greater marketing transparency, information about the risks of missed payments and credit checks before consumers are cleared to use BNPL providers.”

Notes to editors


  • Which? looked at 111 of the biggest online retailers’ websites across the fashion, baby and child, and homewares sectors, looking at how BNPL schemes – which allow you to pay for items in instalments or at a later date – are presented on the customer’s journey through to the checkout page.
  • Irene Scopelliti, Professor of Marketing and Behavioural Sciences at Bayes Business School, explained how these promotions might encourage us to buy more. ‘The focus of these promotions is often on the postponement of the painful act of paying, which would normally act as an ‘inner’ self-control device,’ she told us. ‘Consumers may focus their attention on the cost of the monthly instalment rather than on the full price, falling into the trap of thinking that the item is only £x per month, rather than £x in total.’
  • ‘Buy now, pay later’ not just used by fashion-conscious young shoppers

Case studies

Dan Holden describes feeling bombarded with different BNPL options when shopping for even low-ticket items. ‘I felt I was being pushed into using a BNPL scheme with Wayfair,’ he told Which?. ‘I can see why people end up struggling. It shocks me how predominant the BNPL message is.’ Despite this, Dan did find himself paying with Klarna when purchasing a desk from Wayfair during lockdown. ‘Afterwards I thought to myself, why did I bother selecting Klarna?. It wasn’t an affordability issue – I could have paid the full amount, job done,’ he explained. After he’d paid, Dan realised he hadn’t read the T&Cs properly and was concerned about his credit score: ‘I suddenly wondered what it would do to my credit rating. Paying with Klarna was definitely an impulse decision when clicking through the checkout.’

A Klarna spokesperson said: “Klarna’s BNPL payment options are only offered on purchases over £50 on Wayfair. We apply strict eligibility assessments on each and every purchase a customer makes to ensure we only lend to those who can afford to pay us back. If they miss a payment it will not impact their credit score, however we will freeze their account to prevent them from accumulating debt, because our business model relies on people repaying.”

Em, in a comment on a Which? Conversation post, shares a similar point of view and believes BNPL users should be presented with key information before reaching the checkout. ‘What is particularly poor is when I’ve already decided to make a purchase, I head for the checkout and I am then presented with the distraction of using a BNPL option to pay for goods,’ she explained. ‘If entering into a purchase with the intention of using BNPL, presumably in the knowledge that you cannot afford to pay in full, it must only be offered to registered customers that have pre-selected the option and confirmed they have read all the terms and conditions, before reaching the checkout.’

How to shop safely with BNPL

  • Always read the T&Cs carefully before deciding which scheme to use (and be clear on the penalties if you miss a repayment)
  • Set up alerts for payments
  • Know your rights if something goes wrong with your online order
  • Make any returns promptly

Rights of reply


Asos told Which? it’s inaccurate to suggest it’s not clear enough at each stage of the customer journey on the differences between each scheme, or that it does not include Klarna’s recommended risk warning on its website. It takes its responsibility to its customers incredibly seriously and puts a lot of work into explaining and describing the differences between payment options.

It has detailed FAQs for each payment method (with information on late fees, credit checks and repayments) and includes wording encouraging customers to spend responsibly which it’s had in place since before Klarna advised retailers to include such wording. Where it has banners promoting a BNPL service, it always links through to landing pages explaining more about the BNPL scheme to ensure customers have all the information they need to make an informed choice.

Baby and Child Store

A Baby and Child Store spokesperson said: “We have only ever received positive feedback from customers with our payment options, as it gives them an opportunity to spread the cost of payments at what can be an expensive time.

“Most of the BNPL payment options appear at the top of our website and these link to information about the various options, we will however take on board the feedback from Which? and make available the information from the BNPL schemes in relation to fees.”


A Clearpay spokesperson said: “Clearpay enables responsible spending and encourages transparency at the checkout with clear guidelines and support for our retailers. Our integration team reviews every retailer website to ensure compliance with FSMA and FCA rules on financial promotions. A disclaimer about late fees is clearly displayed at checkout before a transaction is completed, and we do not report to credit agencies so customer credit scores are not impacted through using Clearpay.”

Clearpay told Which? it will be looking into the retailers it has flagged concerns about to make sure the correct information is presented.


Vicky Morley, Marketing Director at Cosatto, said: “At Cosatto we aim to give our customers the most flexible payment options to suit their needs. Buy Now, Pay Later schemes are clearly something that our customers want. In response to customer feedback we have extended our payment provider options recently.

All the payment options have been added to our site after approval and in accordance with the guidelines of each specific provider. However, providing clarity of information to our customers on the payment schemes is of the utmost importance to us and is something we are already working on improving. We will of course take your comments on board and take appropriate action accordingly.”

JD Sports

A JD Sports spokesperson said: “We want to give our customers a choice of payment options so that they can decide what works best for them. We list all the options clearly with a prominent link to all terms and conditions. We also provide extensive information on each payment provider with all the common FAQs and contact information should a customer have further questions.”

Kiddies Kingdom

Mohammed Patel, CEO of Kiddies Kingdom, said: “Buy now, pay later payment options have become extremely popular in the past 12 months and as a business we have had little option but to offer them to stay in line with the competition. These payment options cost the business more to process, and subsequently are not our preferential methods for payment.

“We signpost to the buy now, pay later payment options on each Product page, which has links that lead to pop ups, and for more detailed information these direct users to a detailed FAQ on the providers website. We are in the process of launching a new website where improvements will be made to all areas, including user experience and communication. As a further improvement, we will strive to provide additional clarity to shoppers on buy now, pay later payment options, specifically with the introduction of more detailed landing pages.”


Alex Marsh, Head of Klarna UK, said: “Our short term fee and interest-free Buy Now Pay Later products are a consumer-friendly and sustainable alternative to credit cards, which are laden with high interest rates, hidden fees, and encourage minimum payments that cause millions to sink deeper into debt each year. We uphold the highest standards with regards to being transparent with our customers through straightforward terms and conditions presented each time a customer selects Klarna at the checkout, and by working closely with merchants to explain our payment options either on their website or within their stores. We provide them with clear marketing and product guidelines so that every customer understands how our payment options work as well as a dedicated team to ensure these guidelines are met.”


Gary Rohloff, Managing Director and Co-founder of Laybuy, said: “We welcome Which’s findings and believe it’s important that all providers set high standards of transparency and responsibility.

“For Laybuy, we have always made it clear that BNPL is a credit product. That means we’re never the default payment option on our partner retailer websites and we’re also the only BNPL provider to conduct hard credit checks on customers. We’re here to support customers and help them buy everyday goods in six, interest-free instalments. We provide clear information on how the product works on our website including information on our hardship policy and late fees.

“We work closely with our retail partners to make sure they have the correct information for customers who choose to pay with Laybuy, however we are unable to strictly enforce information displayed on a merchant’s website and it’s important customers ensure they are happy with a merchant’s own terms and conditions before purchasing from them.”

Natural Baby Shower

A Natural Baby Shower spokesperson said: “At Natural Baby Shower, we are dedicated to providing a quality online service to our customers and this includes how we can deliver information on BNPL[schemes]. In response to your inquiry, we launched an investigation into the information displayed across our site for three of three BNPL schemes (two of which are sub-schemes of one BNPL) stated by Which?;  Klarna’s Pay in 3 and Klarna’s Pay in 30 days options (both options are interest-free and do not charge late fees) as well as Laybuy’s Pay in 6 weeks option.

“Our investigation with Klarna revealed that the information stated on our site complies with the onboarding guidelines stipulated by Klarna. We currently include a static page to outline the process of Klarna payments however at checkout, while we agree that more information could be more convenient to the customer, we may run the risk of this information becoming outdated and inaccurate; we would therefore like to avoid housing information that could misinform. We have also reached out to Laybuy and are awaiting a response. We have similarly checked again that we are operating within Laybuy’s recommendations, and our own investigation has not found anything to suggest otherwise. We will continue to look at how the customer experience can be improved as a result of your inquiry.”


Grace Tindall, founder of Scandibørn, said: “Thank you for bringing this to our attention. Customers are now demanding a more flexible approach to payment however their welfare is of the utmost importance to us. As a result of your findings, we will be reviewing our processes and making the necessary changes to be more transparent in our communication of these payment options.”

About Which?

Which? is the UK’s consumer champion, here to make life simpler, fairer and safer for everyone. Our research gets to the heart of consumer issues, our advice is impartial, and our rigorous product tests lead to expert recommendations. We’re the independent consumer voice that influences politicians and lawmakers, investigates, holds businesses to account and makes change happen. As an organisation we’re not for profit and all for making consumers more powerful.

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