Payment plan real world costs

Page 1 of 4 (68 items) 1 2 3 4 Next >
This post has 67 Replies | 2 Followers

Posts 3
Mark Widrick | Forum Activity | Posted: Fri, Mar 8 2019 5:09 AM

I am considering an upgrade from Logos 7 to 8 at the least possible cost.  The “Dynamic Sale price” for a Logos 8 Starter discounted upgrade for me is:

A purchase price of $106.51

Or

$20.21 a month for 6 months with $20.25 down for a total of $141.51

Now go to https://www.calculator.net/interest-rate-calculator.html

Type in 85.96 for the loan amount (106.51-20.25)

Type in 0.5 (years) for the loan period.

Type in 20.21 for the payment

The interest rate is 129%

(Note: If you add on the $5/month service fee from the Payment Plan FAQ, the effective interest rate is 228% and the final cost would be $171.51 for the initial $106.51 purchase)

Please update your FAQ to assist users who aren’t good in math and budgeting to let them know what the payment program really charges.  

Sincerely,

Mark

Posts 21742
Forum MVP
Graham Criddle | Forum Activity | Replied: Fri, Mar 8 2019 5:18 AM

Hi Mark - and welcome to the forums

Mark Widrick:

I am considering an upgrade from Logos 7 to 8 at the least possible cost.  The “Dynamic Sale price” for a Logos 8 Starter discounted upgrade for me is:

A purchase price of $106.51

Please be aware that you can upgrade to Logos 8 using Logos 8 Basic for free - it is available at https://www.logos.com/product/168880/logos-8-basic 

Mark Widrick:
Please update your FAQ to assist users who aren’t good in math and budgeting to let them know what the payment program really charges.  

And while someone from Faithlife may see this and respond these forums are primarily used by other customers.

You might want to send a message to their sales team - contact details are at https://www.logos.com/contact 

Graham

Posts 2061
Forum MVP
Randy W. Sims | Forum Activity | Replied: Fri, Mar 8 2019 5:22 AM

Mark Widrick:

The “Dynamic Sale price” for a Logos 8 Starter discounted upgrade for me is:

A purchase price of $106.51

Or

$20.21 a month for 6 months with $20.25 down for a total of $141.51

(Note: If you add on the $5/month service fee from the Payment Plan FAQ, the effective interest rate is 228% and the final cost would be $171.51 for the initial $106.51 purchase)

The $141.51 includes the $5 service fee. There is no interest charged. The only fee is the $5 transaction fee on each payment. For some amounts it does seem high. But it can be very convenient.

Posts 3
Mark Widrick | Forum Activity | Replied: Fri, Mar 8 2019 5:49 AM

Thanks Graham!

I didn't realize the $5 fee was included in the quoted cost.  The FAQ isn't clear on that.  I'm still then confused by an effective interest rate of 129%.  I realize it's not "interest" but charging it to a credit card at 30% interest would still be a much better value.

Maybe adding a "for a total payment cost of $141.51" on the sales page would be helpful for someone not good at math.

Posts 3
Mark Widrick | Forum Activity | Replied: Fri, Mar 8 2019 5:59 AM

Thank you Graham for the link!  

I couldn't quite wrap my head around the reason for the appearance of usury.  The post from Randy above noted it's just the $5/month fee.

I couldn't find the link for the Logos 8 Basic no matter how hard I searched.  

The email I received from Sales asked if I wanted to upgrade but never intimated that the Basic version was available to existing customers.

Thanks for the prompt reply.

Sincerely,

Mark

Posts 21742
Forum MVP
Graham Criddle | Forum Activity | Replied: Fri, Mar 8 2019 6:03 AM

Mark Widrick:
I'm still then confused by an effective interest rate of 129%.  I realize it's not "interest" but charging it to a credit card at 30% interest would still be a much better value.

It becomes better value for higher-priced purchases when the $5 monthly fee is a smaller percentage of the total cost.

Posts 21742
Forum MVP
Graham Criddle | Forum Activity | Replied: Fri, Mar 8 2019 6:03 AM

Mark Widrick:
Thank you Graham for the link!  

You are very welcome. Enjoy....

Posts 1084
Sean | Forum Activity | Replied: Fri, Mar 8 2019 6:22 AM

I only buy packages towards the lower end of the scale, silver or lower (plus gold one time when I got really good dynamic pricing). At those levels, it's always worked out better to stick it on my credit card and pay it off on my terms. Logos payment plans are a better deal only at the higher levels. You just have to calculate the total service fee versus the total interest you'd be paying over your planned CC term. It's a nice service they offer but not for every situation.

 Logos Now Subscriber -- 22/2/2018

Posts 10041
Denise | Forum Activity | Replied: Fri, Mar 8 2019 7:14 AM

Mark Widrick:
The email I received from Sales asked if I wanted to upgrade but never intimated that the Basic version was available to existing customers

There's two mysteries that swirl around Faithlife.

1. They really can not communicate. For years, some sincerely believed that it was to save money, or concentrate on the software. But after observing them for a decade-plus, the general conclusion surrounds a corporate policy. More talk = more trouble.

2. They play Christian-company, but the gloves come off in marketing. I laughed at your email experience. That's typical. I quickly thought about my own experience last week evaluating March Madness ... what is an actual sale, and what is a Faithlife sale. 

The irony, in both instances, is that neither are good business. My other other advertisers constantly highlight anything free, or a real sale. They want my car in their parking lot. And I dutifully oblige ... I'm no dummy. But with Logos, everything has to be carefully checked. 


Posts 4753
David Paul | Forum Activity | Replied: Fri, Mar 8 2019 7:22 AM

Any time you break a payment into a larger number of increments, it is probably going to increase the overall cost on a percentage basis. That stands to reason. But you should consider that a person is not required to break the payment into six payments...that's just the max allowed for a purchase that size. If the total amount is uncomfortable for a single payment, you can arrange to pay it off in 2-6 increments. Obviously, the quicker the better, but for some the smallest monthly payment is the only way they can make the purchase. Considering that the only other option is not getting the resources at all, the additional amount may not be considered "a bad deal" for some purchasers.

Wait, why is my post count back to ZERO...AGAIN?

Posts 999
Mike Pettit | Forum Activity | Replied: Fri, Mar 8 2019 8:12 AM

In the UK this model of charging would be considered unethical, but i get the impression that it is not seen as such in the USA.

The moral of the story is do not use a payment plan unless you understand the net cash-flows. 

 

Posts 13312
Forum MVP
Mark Barnes | Forum Activity | Replied: Fri, Mar 8 2019 9:05 AM

Graham Criddle:
It becomes better value for higher-priced purchases when the $5 monthly fee is a smaller percentage of the total cost.

This is critical to remember.

Buying Gold for $1,549 on a payment plan is equivalent to an 'interest rate' of about 7%. That's pretty good value. Buying Collector's on a Payment Plan is equivalent to a 1% interest rate.

Posts 3173
Forum MVP
PetahChristian | Forum Activity | Replied: Fri, Mar 8 2019 9:10 AM

Mark Widrick:
I'm still then confused by an effective interest rate of 129%.

Wouldn't it be 29% (interest), not 129% (principal plus interest)?

Posts 10041
Denise | Forum Activity | Replied: Fri, Mar 8 2019 9:48 AM

PetahChristian:

Mark Widrick:
I'm still then confused by an effective interest rate of 129%.

Wouldn't it be 29% (interest), not 129% (principal plus interest)?

Petah, without doing the exact equation, ignoring if 'interest' and illustrating, compare the extra paid, to the average loan balance (only half outstanding on average), allow a little for compounding, and annualize the rate. Pretty hefty.

Not said above, but Bob says the add-on charge is breakeven ... FL doesn't make money on it.


Posts 999
Mike Pettit | Forum Activity | Replied: Fri, Mar 8 2019 9:54 AM

PetahChristian:

Mark Widrick:
I'm still then confused by an effective interest rate of 129%.

Wouldn't it be 29% (interest), not 129% (principal plus interest)?

no it is 129%, think of it as a $106 loan for 3 months (I.e. six months but on average half is due) after which you pay $35 interest, so for a year it would be $140 interest which taking interest on interest into account is around 129%.

Posts 10041
Denise | Forum Activity | Replied: Fri, Mar 8 2019 9:55 AM

Mark Barnes:

Graham Criddle:
It becomes better value for higher-priced purchases when the $5 monthly fee is a smaller percentage of the total cost.

This is critical to remember.

Buying Gold for $1,549 on a payment plan is equivalent to an 'interest rate' of about 7%. That's pretty good value. Buying Collector's on a Payment Plan is equivalent to a 1% interest rate.

I'm not disagreeing. But after I saw your point, and Bob said cost-covering, clearly the big-boy-purchasers get a great deal. If Bob is looking at total payment program costs, then the little-guys are paying for the big-boys. Though in Bob-logic, that may be the plan.


Posts 194
Daniel Radke | Forum Activity | Replied: Fri, Mar 8 2019 10:18 AM

Denise:

Not said above, but Bob says the add-on charge is breakeven ... FL doesn't make money on it.

Can someone point to a place where Bob said this? Was it said a long time ago?

I can understand that when Logos introduced the $5/mo payment plan fee, it probably was a break-even for them. Someone likely had to manually go in each month and process the sale. But, I would be shocked if this process isn't now automated. So, why is there still a $5/mo charge?

I know this is a hard, direct question, and perhaps I've missed a recent discussion, but I think it is fair to ask.

eChristianResources.com - Connecting Christians With Quality Evangelical Resources Available For FREE On The Internet (including links to free Logos/Vyrso resources!)

Posts 2061
Forum MVP
Randy W. Sims | Forum Activity | Replied: Fri, Mar 8 2019 10:59 AM

Daniel Radke:
I can understand that when Logos introduced the $5/mo payment plan fee, it probably was a break-even for them. Someone likely had to manually go in each month and process the sale. But, I would be shocked if this process isn't now automated. So, why is there still a $5/mo charge?

Extra Costs:

  • Credit card transactions cost companies around 3-5% per transaction to run (credit or debit).
  • While the system is automated there are other issues like when a transaction does not go through because of insufficient funds or expired card which has to be handed over to a person.
  • Merging payment plans has to be done by a person.
  • Refunds have to be done by a person and cost because of the credit card transaction.
  • Customer asks for a grace period, skip a month, requires employee time.
  • I have no idea what it costs if someone can no longer continue a payment plan and has to surrender. Depends on time. Not sure what publishers would demand in those cases.
  • You can also look at the $5 per transaction as a disincentive to people wanting to use payment plans on small purchases. Every purchase is a risk. And small ones aren't worth it.

Posts 194
Daniel Radke | Forum Activity | Replied: Fri, Mar 8 2019 11:08 AM

Randy W. Sims:

Daniel Radke:
I can understand that when Logos introduced the $5/mo payment plan fee, it probably was a break-even for them. Someone likely had to manually go in each month and process the sale. But, I would be shocked if this process isn't now automated. So, why is there still a $5/mo charge?

Extra Costs:

  • Credit card transactions cost companies around 3-5% per transaction to run (credit or debit).
  • While the system is automated there are other issues like when a transaction does not go through because of insufficient funds or expired card which has to be handed over to a person.
  • Merging payment plans has to be done by a person.
  • Refunds have to be done by a person and cost because of the credit card transaction.
  • Customer asks for a grace period, skip a month, requires employee time.
  • I have no idea what it costs if someone can no longer continue a payment plan and has to surrender. Depends on time. Not sure what publishers would demand in those cases.
  • You can also look at the $5 per transaction as a disincentive to people wanting to use payment plans on small purchases. Every purchase is a risk. And small ones aren't worth it.

Insightful. I hadn't considered these scenarios. Thank you for shedding some light on this.

eChristianResources.com - Connecting Christians With Quality Evangelical Resources Available For FREE On The Internet (including links to free Logos/Vyrso resources!)

Posts 10041
Denise | Forum Activity | Replied: Fri, Mar 8 2019 11:12 AM

Daniel Radke:

Denise:

Not said above, but Bob says the add-on charge is breakeven ... FL doesn't make money on it.

Can someone point to a place where Bob said this? Was it said a long time ago?

I can understand that when Logos introduced the $5/mo payment plan fee, it probably was a break-even for them. Someone likely had to manually go in each month and process the sale. But, I would be shocked if this process isn't now automated. So, why is there still a $5/mo charge?

I know this is a hard, direct question, and perhaps I've missed a recent discussion, but I think it is fair to ask.

Adding to Randy, this page (scroll down) has a lot of Bob's thinking:

https://community.logos.com/forums/t/118786.aspx?PageIndex=2 


Page 1 of 4 (68 items) 1 2 3 4 Next > | RSS