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What Is Mail Order?

What options do you have when it comes to purchasing business supplies and equipment? While many businesses stick to brick-and-mortar or online retail orders, there’s a third option: mail order. It may seem somewhat old-fashioned, but a mail order account allows you to spread payment for large purchases over time. So, what is a mail order account with a credit facility, and how does this system work? Keep reading to find out.

What is a mail order account?

Sometimes called a shopping account or catalogue credit, a mail order account offers a way to purchase goods on credit. You can either use a physical catalogue or shop online, ordering goods for delivery. Instead of paying all at once, you open a credit account with the vendor and make payments over time. How does this differ from using a credit card to purchase your items? Rather than repaying a credit card company, you simply repay the vendor directly.

An increasing number of UK mail order companies post their catalogues online, but you can also order a paper catalogue for repeat orders. Some companies work with third-party agents who take orders and earn commission. 

Here are a few well-known mail order companies UK:

  • Freemans

  • Littlewoods

  • Studio

  • Very

  • Next

  • Grattan

Originally, mail order businesses were set up to serve customers in rural areas, who would find it difficult to travel in person to the shops. Small businesses would be able to reach a wider demographic of clients with direct mail orders.

What is a mail order account for buyers?

If you’re interested in purchasing goods for either personal use or your business, using a catalogue service is simple. You can place the order through a selling agent or online as you would with any other purchase. Most catalogue companies offer purchases on credit, often with interest-free repayments. However, be sure to look at extra charges and interest if you are unable to repay the full amount within the given timeframe.

What is a mail order account with a credit facility for sellers?

What if you want to sell products using a mail order structure? To begin with, you’ll need to invest in excellent photography and product descriptions for your goods. Customers won’t be able to pick up and try out the products as they would in person. Mail order companies typically use a combination of an ecommerce storefront and a physical catalogue or flyer.

The second step is to choose an online payment processing system to take repayments from customers over time. Some businesses use third-party agents to sell wares, while others will use a variety of online marketing tactics. Finally, you’ll need a smooth shipping system. If you’re just starting out, you might choose to use drop shipping for inventory control. This means that all your products are stored in a separate warehouse and shipped on your behalf, which eliminates the need to store inventory.

The cost of mail order

The cost of mail order credit will depend on the company’s terms and conditions. You can usually count on interest-free repayments for the first year, but for big-ticket items the repayment schedule may be longer. For this long-term catalogue credit, be sure to compare interest rates carefully to be sure you’re not getting charged more than you would at a high street shop. When interest rates do kick in, they tend to be higher than comparable credit card repayments. There might also be added fees for missed or late payments.

Pros and cons of mail order accounts

Is a mail order account right for you? There are advantages for both buyers and sellers.

  • Buyers benefit from interest-free introductory periods and can manage cash flow more effectively by spreading payments over time.

  • Sellers benefit from a steady stream of income in the form of regular repayments.

  • On the other hand, there are also a few potential cons to keep in mind.

  • Buyers can be charged high interest rates for longer-term purchases, with missed payments impacting their credit rating.

  • Sellers run the risk of buyers defaulting on their credit agreements, making it necessary to chase down payments or report to credit agencies.

If you do decide to sell items using a mail order credit system, be sure to create separate accounts for each customer to keep track of everything.

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