What is an RTO Transaction?
Rentals are normally established for payment periods of weekly, bi-weekly, semi-monthly monthly.
At the end of the week or month, the customer can either terminate the agreement without any cost or obligation, or renew the agreement by making another advance rental payment.
If the agreement is renewed a prescribed number of times (usually a total period of 18 months) and the customer meets the terms of the rental agreement, the store conveys ownership of the item to the customer.
At the onset of the agreement, the customer is told very clearly what that prescribed number of renewals is, and the total dollar amount in rental payments he or she will have made by the time ownership is an option.
RTO FACTS:
- The RTO industry is composed of dealers who rent furniture, electronics, major appliances, computers and other products with an option to buy.
- Rent-to-own, or RTO, has been an identifiable U.S. industry for more than 30 years.
- There are approximately 8,000 stores in all 50 states.
- RTO serves 3 million customers (households) a year.
- Because renters pay as they go, and no credit is extended, credit reports on customers are not obtained.
- Previously rented items are refurbished and re-rented at reduced rental terms with all the great services of renting new product - free service, free delivery, free loaner, no long-term obligation - just a great way to save money on pre-rented merchandise!