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Revenues (Notes)
 6 Months Ended
Jun. 30, 2022
Revenues [Abstract]  
Revenues Revenues
The following table disaggregates our revenue for the periods ended June 30, 2022 and 2021:
 Three Months Ended June 30, 2022
 
Rent-A-Center Business
Acima(1)
MexicoFranchisingConsolidated
(in thousands)
Store
Rentals and fees$436,371 $405,184 $15,743 $— $857,298 
Merchandise sales34,952 124,888 929 — 160,769 
Installment sales18,548 — — — 18,548 
Other314 98 29 627 1,068 
Total store revenues490,185 530,170 16,701 627 1,037,683 
Franchise
Merchandise sales— — — 26,505 26,505 
Royalty income and fees— — — 7,067 7,067 
Total revenues$490,185 $530,170 $16,701 $34,199 $1,071,255 
(1) Represents revenues for our Acima segment, as defined in Note 1.
 Six Months Ended June 30, 2022
 
Rent-A-Center Business
Acima(1)
MexicoFranchisingConsolidated
(in thousands)
Store
Rentals and fees$879,066 $830,655 $30,624 $— $1,740,345 
Merchandise sales93,246 298,670 1,733 — 393,649 
Installment sales35,637 — — — 35,637 
Other741 221 56 1,340 2,358 
Total store revenues1,008,690 1,129,546 32,413 1,340 2,171,989 
Franchise
Merchandise sales— — — 45,026 45,026 
Royalty income and fees— — — 13,961 13,961 
Total revenues$1,008,690 $1,129,546 $32,413 $60,327 $2,230,976 
(1) Represents revenues for our Acima segment, as defined in Note 1.
 Three Months Ended June 30, 2021
 
Rent-A-Center Business
Acima(1)
MexicoFranchisingConsolidated
(In thousands)
Store
Rentals and fees$438,162 $463,841 $14,402 $— $916,405 
Merchandise sales49,050 171,346 833 — 221,229 
Installment sales18,191 — — — 18,191 
Other431 93 20 491 1,035 
Total store revenues505,834 635,280 15,255 491 1,156,860 
Franchise
Merchandise sales— — — 29,616 29,616 
Royalty income and fees— — — 7,499 7,499 
Total revenues$505,834 $635,280 $15,255 $37,606 $1,193,975 
(1) Represents revenues for our Acima segment, as defined in Note 1.
 Six Months Ended June 30, 2021
 
Rent-A-Center Business
Acima(1)
MexicoFranchisingConsolidated
(In thousands)
Store
Rentals and fees$867,463 $766,367 $28,109 $— $1,661,939 
Merchandise sales126,428 325,976 1,618 — 454,022 
Installment sales35,964 — — — 35,964 
Other845 386 26 696 1,953 
Total store revenues1,030,700 1,092,729 29,753 696 2,153,878 
Franchise
Merchandise sales— — — 62,671 62,671 
Royalty income and fees— — — 14,208 14,208 
Total revenues$1,030,700 $1,092,729 $29,753 $77,575 $2,230,757 
(1) Represents revenues for our Acima segment, as defined in Note 1.
Lease Purchase Agreements
Rent-A-Center Business, Acima, and Mexico
Rentals and Fees. Rental merchandise is leased to customers pursuant to rental purchase agreements, which provide for weekly, semi-monthly or monthly rental terms with non-refundable rental payments. At the expiration of each rental term, customers may renew the rental agreement for the next rental term. Generally, the customer has the right to acquire title of the merchandise either through a purchase option or through payment of all required rental terms. Customers can terminate the rental agreement at the end of any rental term without penalty. Therefore, rental transactions are accounted for as operating leases.
Rental payments received at our Rent-A-Center Business lease-to-own stores, certain Acima staffed locations formerly operating under the Preferred Lease brand, and Mexico stores must be prepaid in advance of the next rental term. Under the Acima Holdings business model, revenues may be earned prior to the rental payment due date, in which case revenue is accrued prior to receipt of the rental payment, net of estimated returns and uncollectible renewal payments. Under both models, rental revenue is recognized over the rental term. See Note 4 for additional information regarding accrued rental revenue.
Cash received for rental payments, including fees, prior to the period in which it should be recognized, is deferred and recognized according to the rental term. At June 30, 2022 and December 31, 2021, we had $32.5 million and $51.7 million, respectively, in deferred revenue included in accrued liabilities related to our rental purchase agreements. Revenue related to various payment, reinstatement or late fees is recognized when paid by the customer at the point service is provided. Rental merchandise in our Rent-A-Center Business, former Preferred Lease locations, and Mexico stores is depreciated using the
income forecasting method and recognized in cost of sales over the rental term. Rental merchandise in Acima Holdings is depreciated over the rental term using a straight-line depreciation method.
We also offer additional product plans along with our rental agreements which provide customers with liability protection against significant damage or loss of a product, and club membership benefits, including various discount programs and product service and replacement benefits in the event merchandise is damaged or lost, and payment insurance in the event eligible customers become unemployed. Customers renew product plans in conjunction with their rental term renewals, and can cancel the plans at any time. Revenue for product plans is recognized over the term of the plan. Costs incurred related to product plans are primarily recognized in cost of sales.
Revenue from contracts with customers
Rent-A-Center Business, Acima, and Mexico
Merchandise Sales. Merchandise sales include payments received for the exercise of the early purchase option offered through our rental purchase agreements or merchandise sold through point of sale transactions. Revenue for merchandise sales is recognized when payment is received and ownership of the merchandise passes to the customer. The remaining net value of merchandise sold is recorded to cost of sales at the time of the transaction.
Installment Sales. Revenue from the sale of merchandise in our retail installment stores is recognized when the installment note is signed and control of the merchandise has passed to the customer. The cost of merchandise sold through installment agreements is recognized in cost of sales at the time of the transaction. We offer extended service plans with our installment agreements which are administered by third parties and provide customers with product service maintenance beyond the term of the installment agreement. Payments received for extended service plans are deferred and recognized, net of related costs, when the installment payment plan is complete and the service plan goes into effect. Customers can cancel extended service plans at any time during the installment agreement period and receive a refund for payments previously made towards the plan. At June 30, 2022 and December 31, 2021, we had $2.3 million and $2.6 million in deferred revenue included in accrued liabilities related to extended service plans.
Other. Other revenue consists of revenue generated by other miscellaneous product plans offered to our rental and installment customers. Revenue for other product plans is recognized in accordance with the terms of the applicable plan agreement.
Franchising
Merchandise Sales. Revenue from the sale of rental merchandise is recognized upon shipment of the merchandise to the franchisee.
Royalty Income and Fees. Franchise royalties, including franchisee contributions to corporate advertising funds, represent sales-based royalties calculated as a percentage of gross rental payments and sales. Royalty revenue is accrued and recognized as rental payments and merchandise sales occur. Franchise fees are initial fees charged to franchisees for new or converted franchise stores. Franchise fee revenue is recognized on a straight-line basis over the term of the franchise agreement. At June 30, 2022 and December 31, 2021, we had $3.8 million and $4.1 million, respectively, in deferred revenue included in accrued liabilities related to franchise fees.