Purchasing Power: Helping Cash-Strapped Employees Achieve Financial Flexibility

It’s hard to believe that most U.S. workers today continue to live paycheck to paycheck. In spite of recovering from the Great Recession and unemployment at its lowest rate in decades, employees today still are not earning more than they did 40 years ago when adjusted for inflation (The Guardian, July 2018). With rising rents/mortgages, student loans, car payments, healthcare costs and credit card debt, it’s no wonder nearly half (48%) of hardworking Americans suffer increasing stress over personal finances.

CNBC.com reported in January 2019 that 78% of American workers claim they are living paycheck-topaycheck. 58% don’t have $1,000 in savings, leaving them financially vulnerable to ordinary household emergencies, to speak nothing of retirement. Many are forced to borrow from company-managed 401(k)s to cover surprise expenses. Others have little choice but to rely on subprime high-interest credit cards, payday loans, title pawn or rent-to-own contracts that most often result in compounding interest rates and fees, or even loss of merchandise.

“The U.S. financial mechanism simply doesn’t work any longer for most Americans,” says Richard Carrano, CEO ® of Purchasing Power . “This is why we created a service that can provide financial enablement to employees, to help them transition out of the more costly alternatives and give them more level access to products and services we all want and need.”

Since 2001, Purchasing Power has empowered employers to help their employees gain more control over their finances through its revolutionary voluntary benefit platform. As one of the leading and fastest growing companies in the voluntary benefits industry, Purchasing Power® provides a program that offers financial flexibility to cash-strapped U.S. workers.

Accessed through their employer or government/trade organization, the Purchasing Power employee purchase program gives participants the opportunity to acquire the latest brand-name consumer products and services—including electronics, major appliances and furniture, education services and vacation packages—through payroll deduction, when they are unable or prefer not to use cash or credit.

Customers make manageable, fixed payments over a 6- or 12-month term without a credit check, and with no ballooning interest, no hidden or late fees. To aid with responsible purchasing practices, every customer also is assigned a spending limit based on individual salary. It is a fully upfront and transparent payment plan for the customer—and provided at no cost to the employer.

Importantly, along with the purchase program, Purchasing Power offers customers access to free financial wellness tools and resources that help them take control of their total financial picture. Customers can access a core financial education program, an alternative credit report, free budgeting software, personalized financial coaching and a host of financial tips and best-practices advice.

Partnering with Junior Achievement USA, Purchasing Power also helps families introduce basic financial education to children and young teens to prepare them for future economic success. A variety of educational modules help jumpstart conversations and set kids on the path to understanding and developing healthy financial habits.

“Through Purchasing Power, employers can help their financially-stressed employees achieve much-needed relief, not to mention a more reliable and positive experience on the job,” adds Elizabeth Halkos, COO for Purchasing Power. “Personal finance issues are a major distraction at the workplace, often resulting in absenteeism, lower productivity and higher health care costs. Our program works to empower employees to manage expenses and make everyday life more affordable.”

Customer Satisfaction Drives Expansion 

Over the years, positive customer satisfaction with the Purchasing Power experience has led the company to an outstanding 68.1 NPS (Net Promoter Score, 2018) and an A+ Better Business Bureau Rating. Customer response also generated ongoing requests for more and more product categories and service options to be offered within the merchandise portfolio.

In response, the platform today provides employees access to more than 60,000 products and services, including computers and tablets; consumer electronics; home appliances; furniture and mattresses; fitness equipment and sporting goods; nursery and baby gear; musical instruments; vacation packages; automotive services and tires; and educational services including professional certifications, online college courses and SAT/ACT test preparation.

With more than 2.8 million individual orders and over $3 billion in total revenue earned as of 2018, few might have guessed the demand Purchasing Power would ignite among the underserved American workforce. Someone who did foresee this considerable promise came aboard as one of Purchasing Power’s first leaders and original business industry advocates.

The Undisputed Leader 

Growing up in the mid-Atlantic region, Richard Carrano witnessed the financial hardship his mother endured as she struggled to maintain a modest home for her growing family. Without many practical credit options available to his mother, Carrano realized at a young age that a reasonable financing solution without exorbitant interest or fees could be a financial lifeline both to her and to other hardworking families.

When the opportunity came his way in 2001 to serve as CFO at a start-up company established originally to make home computers affordable to everyday workers across the country, he recognized the explosive potential of providing a viable alternative to high interest credit cards and other sub-prime financing options for customers who need (or prefer) to pay over time.

“I had first-hand experience with what it means to live paycheck to paycheck, and was all too familiar with the typical challenges a family faces in that situation,” Carrano noted. “When I was approached with the initial business plan and underlying mission for Purchasing Power, I knew almost instinctively that this could significantly change the lives of millions of workers across the country. It became a true turning point in my career trajectory.”

In his leadership role, Carrano shepherded Purchasing Power’s evolution from a nascent e-retailer to an enormously valuable financial services platform reaching more than 300 large companies including many Fortune 500s, worker associations and government agencies. He accomplished this through positioning and marketing the company’s services as an employee voluntary benefit offered to employers through benefit brokers.

Over the years, his remarkable success in the B2B industry earned Carrano the Atlanta Business Chronicle‘s “CFO of the Year” award in 2008, and GeorgiaTrend magazine’s “40 Under 40: Georgia’s Best and Brightest” accolade. Further business advancement under Carrano’s leadership included selling Purchasing Power to private equity investment firm Rockbridge Growth Equity in 2011, and again to Flexpoint Ford, Ltd. in 2016.

The company, too, has been recognized for its outstanding business accomplishments and practices. Purchasing Power ranked 10 consecutive years (2007- 2017) among the INC. 5000 Fastest Growing Private Companies. Recent accolades include 2018 Gold, Silver ® & Bronze American Business Stevie Awards for (respectively) Outbound Marketing Program of the Year, Best Customer Satisfaction Strategy and HR Team of the Year.

A Great Place to Work at, too! 

As part of its company culture, Purchasing Power employees are committed to giving back to the local Atlanta community. The company is built around improving the everyday lives of customers, so core values support that mission. Employees volunteer roughly 3,400 hours annually, serving local non-profit organizations and community service outreach efforts, including Habitat for Humanity, the Atlanta Community Food Bank, Junior Achievement and Open Hand Atlanta.

Tackling Challenges 

Despite its unique value proposition to both employees and employers, Purchasing Power still has to work hard at spreading its message(s) across an increasingly crowded voluntary benefit landscape. Some of the company’s biggest challenges include:

  • Opening eyes and convincing senior level management at large companies of their average employee’s financial realities—40% of the U.S. working population (80-100 million people) are simply without adequate access to affordable consumer finance solutions.
  • Because of the influx of predatory lending institutions directed toward the financially vulnerable, there is often a dishonest, predatory stigma against any/all products marketed to employees in need. Purchasing Power faces an uphill battle with would-be clients who’ve not yet heard of the innovative program.
  • Competition for the attention of HR representatives continues to intensify—every year there are scores of “shiny, new” voluntary benefits that become instant media favorites, like pet insurance, fertility egg harvesting, senior care options, etc.
  • High turnover rates among HR professionals/executives in a high employment era means that every new administration needs to be “re-educated,” convinced afresh about Purchasing Power and the solutions the platform provides.

True Value is the Mission 

Purchasing Power’s ongoing mission is to work in partnership with employers, providing true value at both the institutional and consumer level. To its customers (employees), the company offers transparency, award-winning customer service, responsive solutioning, differentiation from lesser options, trust and a lengthy track record of success. For Purchasing Power’s clients (employers) and brokers, its program benefits can be leveraged to improve recruitment, retention and improved productivity strategies to aid their business performance.

Soon Purchasing Power will launch two new exciting services. Starting in Fall 2019, the organization is expanding the employee purchasing program to include automated bill-paying and preset savings services for employees with a new voluntary benefit designed to offer financial convenience and to help avoid any late payment fees in the future.

On the horizon, Purchasing Power is developing an allnew vacation travel platform that will revolutionize the travel booking experience for its customers.

All of its proposed expansions and improvements spring from the genesis of direct customer requests. The company will continue to evolve as both employee and employer needs are presented, and new technologies are created to offer affordable solutions.

Customer Feedback

“It was very convenient in a time of much need. My home computer crashed and my children and husband both needed it to complete homework assignments and we were on a very tight budget. Purchasing Power really came in handy and reduced the stress of trying to come up with the money to buy one.” —Alice R.

“I think it’s a wonderful way to empower employees. I purchased a bed, and without Purchasing Power it would have been a strain on my budget. I love that I am able to get something like a bed, which I really needed and feel like I am able to afford it. This is the first bed I have ever had that was not used and given to be by a family member. I am very grateful.” —Amber T.

“You have helped save Christmas by helping me with a new trampoline. You have also saved many birthdays with iTunes cards ($100). You are currently helping me with some amazing cookware.” – Larry B

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