By Mark Lazarus, Director, Lazarus Legal, Legal Partner of the Australian Furniture Association
The Buy Now, Pay Later (BNPL) model is now embedded in Australian furniture retail. For an industry defined by high-value discretionary purchases, BNPL has helped bridge the affordability gap for customers and increase conversion rates for sellers. The Australian Furniture Association agrees that the regulatory environment that has enabled this growth is now undergoing a fundamental shift.
From 10 June 2025, new federal legislation will bring BNPL products under the umbrella of the National Consumer Credit Protection Act 2009 (Cth) (NCCP). This change introduces a formal credit licensing regime for BNPL providers and imposes new legal obligations across affordability, advertising, and hardship management.
While the spotlight is on providers such as Afterpay, Zip and Humm, the ripple effects for furniture retailers, especially those promoting BNPL at point of sale or online checkout are substantial and urgent.
Understanding the Legal Shift
Until now, BNPL services have largely escaped the scrutiny applied to traditional credit products. The new framework, announced by the Commonwealth Treasury and enforced via ASIC, will eliminate this regulatory carveout.
From June, BNPL providers must:
· Hold an Australian Credit Licence (ACL).
· Comply with responsible lending obligations, including mandatory suitability and affordability checks.
· Offer formal hardship provisions for financially vulnerable customers.
· Ensure their advertising meets the requirements set out in the National Credit Code.
Retailers who facilitate BNPL sales are not required to obtain a credit licence themselves. However, they must be aware that any representations made to customers, or marketing material used to promote BNPL options, must now comply with credit law standards.
This includes digital ads, in-store signage, verbal claims by staff, and even how the BNPL option is presented during the checkout process.
Practical Implications for Furniture Businesses
The potential exposure for furniture sellers is not theoretical. Here are three key areas of concern:
1. Conversion Risk Due to Affordability Checks
BNPL was popular in part because it avoided the friction of formal credit applications. Mandatory affordability assessments may introduce delays or rejections, which in turn could increase cart abandonment or reduce on-the-spot conversions.
2. Misleading or Non-Compliant Marketing
Terms like “instant approval,” “interest-free with no questions asked,” or “guaranteed financing” may now be subject to regulatory enforcement if found to mislead consumers or bypass responsible lending expectations. Retailers may be held liable if customers are induced to enter BNPL arrangements based on inaccurate representations.
3. Reputational Exposure from Non-Compliant BNPL Partners
If a BNPL provider fails to meet its new obligations, retailers associated with that provider may suffer reputational damage, especially if customers experience financial hardship or lodge formal complaints.
What Retailers Should Do Now
There are several prudent steps furniture retailers can take to prepare for the regulatory change:
· Review your current BNPL provider agreements: Ensure they are updating their licensing status, customer assessment protocols, and legal disclosures.
· Conduct an audit of marketing and point-of-sale material: Remove or revise language that implies instant or risk-free financing. Align all language with upcoming NCCP obligations.
· Implement staff training and internal policies: Ensure your sales and support teams understand what can and cannot be said about BNPL arrangements under the new legal framework.
· Consider checkout design changes: If friction increases due to mandatory checks, offering customers alternative payment pathways (such as layby or traditional credit) may help retain sales.
How Lazarus Legal Can Assist
As the official legal partner of the Australian Furniture Association, Lazarus Legal is actively supporting furniture businesses through this transition. We provide:
· Legal audits of BNPL exposure including contract terms, checkout flow, and consumer messaging;
· Training and policy support to help ensure your team understands its obligations under credit law;
· Liaison with BNPL providers to clarify compliance status and share liability through contractual terms.
The regulatory shift in BNPL law is not a niche issue. For an industry like furniture retail where BNPL adoption is widespread and customer margins are sensitive this change must be treated as both a legal and commercial inflection point.
Compliance is not merely about avoiding fines. It is about maintaining trust, preserving reputational capital, and ensuring customers are engaging with your business on clear and ethical terms.
Retailers who act now by reviewing contracts, updating marketing, and preparing staff will not only avoid risk but may turn compliance into a customer confidence advantage.
Contact Lazarus Legal HERE and don’t forget to mention your AFA Membership status for your AFA Member discount.