When you can buy fast fashion for mere pennies, any alternative starts to feel expensive – especially when we’re all trying to curb our spending amid a cost-of-living crisis. “It’s too expensive” is one of the leading reasons people cite for not adopting a sustainable lifestyle, according to a recent survey. So it’s hardly surprising that people also say they’d be much more likely to live and shop sustainably if more affordable eco-friendly alternatives were available to them.

To do just that, a growing number of sustainable brands are introducing buy now, pay later (BNPL) schemes, allowing their customers to spread the cost of their products. Lucy & Yak, Nudie Jeans, Asket and Mara Hoffman are among the list of sustainably-minded brands that offer BNPL via the likes of Klarna, Clearpay and Afterpay.

“We’re always on the lookout for ways to be an inclusive brand, so we wanted to offer customers a BNPL option to make sure we can be more accessible to more people who are looking to ‘responsibly’ buy new clothing, who might otherwise have been put off by the price tag,” says Lucy Greenwood, co-founder of Lucy & Yak, which has had to increase its prices over the past year due to the rising cost of organic cotton. 

Plenty of people are taking brands up on the offer of BNPL. Some research suggests that 24% of people in Europe are now using such schemes, and BNPL payments are expected to account for nearly a quarter of all global ecommerce transactions by 2026 – up from just 9% in 2021. 

“If the sustainability option was cheaper or the same price [as non-sustainable products], I don’t think there would be a problem in changing people’s behaviour,” says fashion industry consultant Elizabeth Stiles. “There is a positive [with BNPL] to mend that warped sense of value. You maybe wouldn’t want to spend £200 on a dress that is made ethically and fairly but splitting it into four payments of £50 makes it feel more accessible.” According to GWI, a higher uptake of BNPL means consumers are more likely to pay more for eco-friendly products, with 62% of BNPL users stating they would do so. 

While BNPL makes products more accessible, it makes credit more accessible, too. Because of this, it’s been characterised as predatory, especially since Gen Z are its foremost users. 

“Because [BNPL] is so accessible and so easy, it’s very easy to trap people in. If they miss out on a payment, this is where the whole thing starts to become incredibly expensive,” says Olga Miler, co-founder of financial wellness platform Smart Purse. “What we have seen happening is people embarking on multiple BNPL schemes and then starting to struggle with the organisation of it all. They enter a rather vicious cycle of being trapped in these schemes having spent far more than they could afford, and that then brings them into the whole downward spiral of debt collection, negative credit score, and all of these impacts.”

However, Miler believes BNPL can be a useful financial tool that’s better than short-term credit or an overdraft, as long as you can manage it responsibly. “The instalments need to fit within the given timeframe of your budget, otherwise don’t do it,” she says. (Miler also states you should make the effort to read the fine print and understand the conditions of the financial commitment you are making.) As a relatively new form of credit, BNPL schemes remain interest-free by charging the brand or retailer rather than the customer, meaning that it’s a cheaper option than many of the alternatives. But because of the way it’s embedded within checkouts, it’s also much easier to forget, or dismiss, that you are entering into a financial commitment. 

Concerns around a lack of responsibility from brands and BNPL providers has led to proposals for strengthened regulation. In June 2022, the government announced plans that lenders will be required to ensure loans are affordable and that rules will be amended to ensure advertisements are not misleading. Lenders will also need to be approved by the Financial Conduct Authority and, if changes go through, borrowers will be able to complain to the Financial Ombudsman Service.

But for now, Labour MP Stella Creasy has major concerns, telling Stylist: “BNPL credit is dangerous – not only do many end up spending more than they meant to by using it, it’s also not regulated, which means if you get into difficulty with it you can’t go to the ombudsman for help. 

“That’s why I’m urging retailers not to offer it, and warning consumers about it. In the cost of living crisis we’re facing the evidence shows how it’s dragging millions into a cycle of toxic personal debt. With Christmas on the horizon and the pressure so many face of having too much month at the end of their money, we can also do something about it. MPs can step in where ministers have failed and vote for New Clause 28 to compel the government to act now before even more people end up in financial misery because of these companies.”

Even with more regulations in place, people still question whether BNPL fits within the values of sustainable fashion. 

“I start to see a problem when brands start using these mechanisms to push more stuff onto people. By default, responsible, sustainable fashion brands shouldn’t be doing that,” says Miler. Klarna has suggested that retailers typically see a 68% increase in average order value with Klarna Instalments, and a 20% increase in purchase frequency for customers shopping with Klarna Pay in 30 Days. 

“We totally agree that BNPL schemes have their pros and cons, but after much discussion, we felt that the positives outweigh the negatives for [Lucy & Yak’s] customers,” says Greenwood. 

Stiles thinks there could be wider positives in levelling the playing field, too. “If you can buy a £15 dress from a fast fashion brand through Klarna, and the £200 pound brands are digging their heels in saying no, they’re failing to give people a better option,” she says.

With stricter regulations in place and more brands adopting it, it’s clear that BNPL isn’t going anywhere. And the figures show that yes, it can lead to consumers paying more for more environmentally responsible fashion. So it seems the question will shift from “Should sustainable brands use BNPL?” to “How can they implement it responsibly?”

Images: Getty