"They offered zero percent for a year so we figured it's a little more than we would have spent but we got a whole year to pay-- you know, why not?" Jeff Killian said.
His wife, Sue said they knew they could pay it off well before the payment deadline -- and did -- sending it in a month before it was due. The Killians did something else before that money was due: something that retailers in this tough economy should love to hear-- they went back to Sears and bought more stuff.
"Just a couple weeks before we were going to pay it off, we went and purchased patio furniture because they had a great sale."
That is where this story goes south, the Killians say. And the numbers show how: on their Sears card bill, the $1,222 deferred payment for the mattress and another $1,100 for the new furniture. When Sue sent in a check for the exact amount due on the mattress -plus a monthly minimum -- she says she included a written instruction to apply the payment to the promotion. But the next bill had a $313 dollar surprise: interest tacked on for not paying off the mattress in time.
It turns out their payment was applied to the newer purchase-- which let the clock expire, and all the interest catch up, from the deferred payment offer.
"It was obvious that was the amount to cover the promotional deal, and what they said to me is: well, you have to call us and tell us how you want it applied," said Sue Killian.
Here's what the Killian's didn't know; after they signed up for that card, the people at Sears had nothing further to do with it. The Sears card is issued -- and completely administered by -- embattled financial giant Citigroup.
"They had no concern about trying to make the customer happy. It was just like, too bad for you!"
Sears apologized that the Killians didn't get the service they expected and contacted Citigroup. Sears determined the payment was not applied as the Killians intended and worked with Citi to get that corrected. For its part, Citi says it's now planning to make its "deferred interest promotions and terms more understandable."
Though this type of marketing relationship is common in the retail world, it may mean little in the real world of consumers like the Killians. The ordeal cost them time and money, and cost Sears their loyalty.
"The thing that kills me is if it hadn't been loyal customers, and gone back and gotten more furniture- this never would've happened.
The Killians now have that $313 back, and say after two calls from Sears executives, just may take their business back. They say it is unlikely they will get another Sears credit card, Parker reported. And for all others who bite on "buy now pay later" promotions, Parker says know this: there are no specific regulations that govern deferred consumer payments. You are on your own making sure your money is applied to a specific debt.
If you're having credit troubles, e-mail your story to CreditCrunch@nbcchicago.com.