Klarna targets British shoppers with loyalty scheme that ‘encourages overspending’

Young shoppers could be encouraged to overspend by a new “loyalty” programme being launched by Britain’s biggest “buy now, pay later” firm.

Klarna, which offers shoppers the chance to purchase items even if they do not have enough money in the bank to buy them outright, will launch its Vibe rewards programme in Britain next year. The scheme was launched in America earlier this month and offers points – known as “vibes” – when a customer spends using Klarna.

Users are rewarded with gift cards and “shopping experiences” when they collect enough points.

However, there are fears that reward schemes can encourage consumers to spend beyond their means.

StepChange, the debt charity, said Klarna’s scheme carried “obvious risks” for young shoppers, who were the

BUY NOW, PAY LATER

most common users of such services. Sue Anderson of StepChange said: “By tempting people to aspire to reach the thresholds needed to unlock rewards, customers are being encouraged to divert their focus away from whether or not the underlying spending is affordable, and potentially to spend more.”

Klarna is the first “buy now, pay later” firm to offer a programme to reward spending. The firm said its scheme was designed to encourage responsible shopping and that points were earned only if a customer paid on time. Luke Griffiths of Klarna said it performed regular affordability checks on its users.

However, a Telegraph Money investigation disclosed last week that Klarna had been forced to overhaul its security systems after under-18s had used the service to go on shopping sprees. Shoppers have flocked to these controversial services to fund their spending during lockdown. Clearpay, another company in the sector, has more than a million customers after just one year of trading in Britain.

It said users spent an average of 25pc more than those who used other payment methods. The most popular product bought during lockdown was Nike Air Force 1 trainers.

Telegraph Money disclosed last week that Klarna was forced to fix its security systems