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Offering instalments at the holiday checkout can help you close larger sales, as long as you price the cost of each one before the season starts.
Holiday shoppers in Canada planned to spend $975 on average last season, and that budget has to stretch across gifts, food and travel. A single $600 purchase takes most of it in one swipe. Splitting that purchase into equal payments keeps the item within reach, which is why buy now, pay later (BNPL) shows up at so many tills in November and December.
That same sale also costs more to accept, and the gap varies widely from one plan to the next. Buy now, pay later in Canada covers two very different arrangements, and each one treats your margin, your refunds and your staff differently. The decision belongs in October, with last year's sales report open.
Buy now, pay later lets your customer take the goods today and pay in scheduled instalments, while you receive the full sale amount up front. A lender or card issuer carries the balance and collects the payments. You pay a fee on the transaction in exchange for the sale and for being free of the repayment risk.
Picture a shopper at a bike shop choosing a $900 commuter bike as a gift. She selects an instalment plan at the checkout, agrees to the schedule and leaves with the bike. Your deposit arrives on the usual timeline for the full $900, less the fee attached to that plan. If she misses a payment in February, the lender follows up with her, and your books don't change.
The detail that matters is who the lender is. It decides what the customer has to do at the till, what fee comes off your deposit and who handles a return.
Buy now, pay later options in Canada fall into two groups. Third-party plans run through a separate lender that approves the shopper at checkout and pays you on its own terms. Card-based instalment payments run on the credit card your customer already carries, with the issuer converting the purchase into equal payments.
Installments Enabled by Visa is the card-based kind, and merchants who process with Moneris can offer it at the terminal and online. An eligible cardholder sees the plan options during a normal card payment and picks one. There's no new application and no second device on your counter. The sale settles like any other credit card transaction, and the plan's fees and minimum purchase amounts are set by the card issuer.
A third-party plan asks more of the moment. The shopper often signs up on a phone, waits for an approval and then completes the purchase, which is fine online and slower in a lineup. It can reach customers who don't hold an eligible card.
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What to compare |
Third-party plan |
Card-based instalments |
|
Who lends the money |
A separate lender approves each shopper. |
The customer's own card issuer carries the balance. |
|
What the shopper needs |
A new account and an approval at checkout. |
An eligible credit card they already hold. |
|
How you get paid |
The lender pays you on the schedule in its agreement. |
The sale settles with your other card deposits. |
|
What it costs you |
A per-sale fee that is often higher than card acceptance. |
The rate your processor applies to instalment transactions. |
|
How returns work |
The refund goes through the lender, which adjusts the plan. |
The refund goes back to the card like any other. |
Instalment payments can increase sales on higher-priced items, because they lower the amount a shopper has to part with today. The effect is strongest on purchases that sit just above a gift budget. It is weak on small baskets, where few people want a payment schedule for a $40 sweater.
The evidence from shoppers points the same way and carries a warning with it. In a 2026 survey of buy now pay later users in Canada, 22 per cent said the option leads them to spend more than they otherwise would. That's the conversion case in one number. It also means roughly four in five users say their spending doesn't move, so a plan won't rescue a weak season on its own.
Think about where your own prices cluster. A furniture store with a $1,400 average ticket has many sales that an instalment offer could tip. A gift shop with a $55 average ticket has almost none, and the sign on the counter mostly adds a question for staff to answer.
Buy now, pay later costs a small retailer a fee on every instalment sale, plus the time spent on setup, training and returns. Third-party plans often charge more than standard card acceptance. Card-based instalments are priced by your processor, so the rate should be confirmed in writing before you promote the offer.
Run the math on one product before you commit. Say a $500 espresso machine earns you $150 in gross margin, and the instalment fee comes to $20 more than a regular card sale would. You keep $130 on a sale you might have lost, which is a good trade. Now apply the same plan to a customer who was always going to pay in full, and you've handed over $20 for nothing.
That second customer is the real cost.
A minimum purchase amount keeps the offer on the items where it earns its fee.
Instalment sales follow your normal return policy, but the refund has to reach the plan as well as the customer. A card-based instalment is refunded to the card and the issuer adjusts what's left. A third-party plan is refunded through the lender, which can take longer and prompts more questions at your counter.
Boxing Week is where this shows up. A customer returns a $700 winter coat bought on a six-payment plan after making one payment. Your staff need to know which button to press, what the customer will see on their statement and who to call if the plan doesn't update. Without that, a quick return holds up the lineup.
Fees deserve a look here too. Ask if the instalment fee is returned to you when a sale is refunded, because the answer differs by plan and it affects your true cost in a month with heavy returns. Write the steps on one page and keep it beside the terminal.
BNPL is worth it for a small retailer when average tickets are high enough for a payment plan to matter, margins can absorb the fee and the checkout stays quick. It is rarely worth it for low-priced, thin-margin goods. The answer comes from your own sales data and a short test.
Before the season, work through these five checks.
A toy store owner who finds 30 sales over $200 last December has a small pool to work with and can skip the signage. A jeweller who finds 400 has a clear reason to offer a plan and to mention it early, on the product page and beside the display case. Starting with the card-based option keeps the test simple, since it adds no new vendor.
They help when a specific customer needs a specific purchase to fit a holiday budget, and they cost you when they're handed to everyone. Owners who check ticket size, margin and refund handling first usually end up with a narrower offer that earns its keep.
There's a human side to this as well. Your customers will be paying for December into the spring, and a store that explains the plan plainly earns more trust than one that pushes it at the till. Train staff to offer it once, answer questions honestly and let the shopper choose.
Moneris supports Installments Enabled by Visa on the same terminals and online checkout that take your other card payments, so trying it doesn't mean rebuilding your setup in the busiest weeks of the year. Start with one product category, watch the fee line on your statement through January and keep what works.Buy now, pay later may be worth offering if you sell higher-priced items where splitting the cost could make a purchase more manageable. Before offering it, consider your average transaction size, margins, fees and how the option fits into your checkout experience.
With buy now, pay later, customers receive their purchase right away and pay for it in scheduled instalments. Depending on the plan, the merchant receives the sale amount upfront, less applicable fees, while the lender or card issuer manages the customer’s remaining payments.
Buy now, pay later options in Canada generally include third-party plans and card-based installment payments. Third-party providers may require customers to apply at checkout, while card-based options such as Installments enabled by Visa use an eligible credit card the customer already has.
Instalment payments can help support sales of higher-priced products by spreading the purchase cost over multiple payments. Their impact will depend on factors such as your average transaction size, product mix and how many customers choose to use them.
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