Question: When Stan first tries to return the drink machine, an employee explains that the store just takes an initial payment, then remaining payments are handled by a separate finance company. How does the store even make a profit if they only get the initial payment? I know this is a TV show, but it sounds like the banks who let people mortgage homes for small down payments in the late 2000s, then sold the debt to other companies.
Azalea
4th Jul 2024
Answer: The store sells the debt (at a discount) to the finance company, which then has the right to collect the balance due. This frees the store from the administrative burden of tracking payments and transfers the risk of non-payment to the finance company. This scheme usually works best when there is a huge markup on the product.