With little else to do over the last year, 53% of consumers are shopping online more now than at the start of the pandemic – but a new tool is the latest measure being introduced to help consumers resist the urge to spend online unnecessarily.
One-click purchasing options can make it easy to overspend online, which is why digital financial coaching app, Claro, has created a Google Chrome extension to help shoppers discover how long they would have to work to pay for the total cost of their online shopping baskets – based on their salaries.
The news comes following the Financial Conduct Authority (FCA) announced its intention to introduce regulation for interest-free buy-now-pay-later schemes – popular with both online shoppers and retailers – following a review which found they have the potential to cause harm.
Free to download and available from the Chrome Web Store, the Claro Money Widget aims to help people make smarter and more informed spending decisions to help them think through purchases more and stay within their budgets.
Based on the average UK salary, the plug-in calculates how many hours consumers must work to pay for the items in their basket.
And for a more accurate and personalised calculation, users can verify their email address to set their salary on the extension – to find out specifically how much they would have to work to pay for an item.
Using the standard UK tax brackets to calculate shopper’s take-home salary, the extension divides the user’s shopping basket total by their hourly pay, based on an eight hour working day.
The retailers you can currently use the extension with include: Amazon.co.uk, eBay, Boohoo, Next, ASOS, IKEA, Beauty Bay, Missguided, and &Other Stories, with further popular retailers being added.
Claro, which seeks to empower people to develop a smart money mindset and healthy financial habits, designed the extension to encourage people to make more considered decisions about what they are buying, as well as keep track of their spending and stay within their budget.
The Claro Money Widget helps shoppers to understand the reality of how much their online shopping basket costs in real time to discourage them from overspending or making unnecessary purchases. Or if they do choose to make those purchases, ensure they are within their financial plans.
“With the increase in online shopping and ‘emotional spending’ over the pandemic – when consumers buy something they may not want or even need for the gratification of a purchase – consumers can easily see and buy an item online in a matter of minutes, without thinking about the consequences or ramifications of spending that money.
One-click purchasing options and seamless PayPal integration on many sites, such as Amazon and eBay, mean that shoppers don’t even have to get their card out to complete a purchase and further alienating them from the comprehensive understanding that they are spending hard earned cash.
Further to this, buy-now-pay-later schemes mean that unplanned spending sprees won’t show up on bank balances or credit card statements for months to come causing consumers who are not savvy to financial planning to lose site on their funds and, as reports show, could land some in serious debt.”
(Alex Ford, Chief Revenue Officer at Claro comments)
The Claro Money Widget extension is built with secure bank-grade encryption so that users are safe while using it. None of the salary information shared is stored. The extension is completely free to use, and the plug-in only requests a user’s email address if they want to set their salary.
Claro is a subscription-based app and digital network that offers financial coaching and provides education, support, community and the tools to inform everyday smarter investment decisions.
For more information, please click here.