Tiptop Adds a New Twist to BNPL By Applying Trade-In Value to New Purchases

Tiptop Labs Inc., a payments-service provider, has launched a buy now, pay later program that allows consumers to trade in items for a credit toward a new purchase with select e-commerce merchants.

The idea of applying trade-in value for a new purchase grew out of a trade-in-only app Tiptop launched about a year ago. Applying trade-in value toward the cost of a purchase is a way to increase consumers’ purchasing power, the company says. On average, it says, households in the United States have $1,800 worth of goods that match items accepted for trade in the Tiptop’s catalog. The Tiptop catalog lists 50,000 items that can be accepted for trade in, such as an iPhone or gaming system.

The new program is aimed at consumers who otherwise would attempt to sell items through an e-commerce marketplace, such as eBay or Apple Inc.’s Apple Trade In program. The latter allows consumers to trade in Apple-branded products for a credit toward the purchase of a new item, according to the company. TipTop’s goal is to enable trade-ins for a variety of branded products and eliminate the need to list an item in a marketplace.

“Buy now, pay later doesn’t lower the price of an item, no matter how good the terms. [It] simply spreads out the cost of the purchase over multiple payments,” a Tiptop spokesperson says. “When you stack trade-in value on top of BNPL, it reduces the purchase price. It’s found money for the consumer.”

To determine the value of a trade in, Tiptop uses a machine-learning model that shows the current market value for the item. After an item has been accepted for trade in, consumers can scan a QR code that generates a prepaid shipping label. The consumer then packages the item and takes it to a shipping carrier. Alternatively, consumers can arrange for an on-demand courier through Uber.

Consumers making use of Tiptop’s interest-free BNPL offering can pay for the purchase in four installments. Initial merchant partners include Nothing Tech, Cradlewise, Backbone, Phonedaddy, and King of Christmas.

The Tiptop app is compatible with the Shopify platform, and plans to add compatibility with other popular e-commerce platforms such as Adobe Commerce, BigCommerce, and WooCommerce.