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June 22, 2008
By RICHARD NILSEN, The Leader-Herald
According to U.S. Sen. Charles Schumer, renting furniture and appliances can be much more costly than buying them outright. Local vendors don’t see it that way, however.

Schumer claims rent-to-own scams have spread to rural upstate New York. At the Rent-A-Center chain of stores, Schumer said consumers are paying nearly 300 percent over the recommended retail value for some items in rent-to-own agreements.

Schumer spokeswoman Dierdre Murphy said the findings are based on a survey of upstate counties. In a news release, Schumer calls on the Federal Trade Commission to provide greater oversight of the rent-to-own industry. He is pushing for a plan that would force companies to better disclose their prices and fees.

“These companies are skirting state usury laws by claiming to charge lease fees,” Murphy said.

She said consumers are under the impression they will own the televisions and appliances they are renting, and often the items must be returned after paying more than the purchase price would have been.

Local Great Rentals owner Dale Hinderliter said people have the wrong impression about rental companies like his.

He especially took issue with the idea that poor economic times boost rentals.

“We are down in rentals,” Hinderliter said. “We have been down the past six weeks, ever since the price of gas went over $4 per gallon.”

Hinderliter said rather than people shopping locally so they wouldn’t have to use more gas, people take the money for gas out of their budget. Thus, people refrain from renting or buying items like televisions, appliances and furniture, he said.

“We had been running parallel to last year up to six weeks ago,” Hinderliter said. “Then things slowed way down. We’ll have to see what happens when people get used to the new gas prices.”

Hinderliter said he knows of other rental companies around the country that are experiencing the same slowing rental business.

He said much of his business comes from professional medical companies that are bringing a specialty medical staff employee into the area for a short term. Hinderliter said his business then furnishes an apartment for the employee for a set time.

“They may call and say they want five rooms of contemporary furniture and appliances for a fixed period of time, and we do that,” Hinderliter said.

He said in spite of fuel prices, he has free delivery and pickup. He said he hopes he could continue that policy, but with fuel going up, it may be difficult.

“We had a delivery of furniture that had a 25 percent freight surcharge added,” Hinderliter said. “Freight charges are getting to be a guessing game.”

Hinderliter said the difference between his cash sale and rent-to-own prices for appliances is about 20 percent. He said the figures don’t come close to numbers detailed in Schumer’s report.

Hinderliter said some of his customers are unable to get credit and have to rent items, but most are not in that situation.

“A lot of my customers are just good people living from paycheck to paycheck,” he said.

At the Rent-A-Center in Gloversville, Manager Richard Lopez would not comment on corporate policy, but he said he didn’t see a big change in business at the Gloversville store since the economy has slowed.

“I thought there would be a bigger change in business here,” he said. “It hasn’t happened.

“We’ve been running pretty steady at 30 new deliveries a week. We had one ‘fluke’ week when sales were way down, but otherwise, things have been pretty steady.”

Prices posted on items in the store showed a final rent-to-own price of about twice the cash sales price. For example, a dinette set sells for $700, while the rent-to-own price is $1,400.

Richard May of the Association of Progressive Rental Organizations, which represent Rent-A-Center and Aaron’s companies, said Schumer’s initiative doesn’t compare similar issues.

“The nature of the rental industry is different than cash or credit sale items,” May said. “The customer is in control with the rental industry and can return the item rented without obligation at any time.”

May admitted the base price for a cash sale of an item may be considerably higher than the cash price in a discount or typical “sales only” appliance store.

He said because of the focus on rental rather than ownership, and the many options available to a rental customer, the comparison of rental and purchase prices with stores that only sell and do not rent items is unfair.

“Since the law states a rental-purchase total price can only be two to two-and-a-half that of the cash sales price, in order to reflect the full-term price accurately, the cash price must be higher than at a store where rental is not an option,” May said.

Hinderliter said he’s in favor of regulations for the rental industry to ensure all the policies are clear.

“We have a very high customer-satisfaction rating,” he said.

Richard Nilsen is a general assignment reporter and can be reached at

Article Photos

The Leader-Herald/Richard Nilsen
Dale Hinderliter of Great Rentals in Gloversville is shown with some of his appliances at the store Tuesday.



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