Revenues

12 Months Ended

Dec. 31, 2023

Revenues [Abstract]

Revenues

Revenues

The following tables disaggregate our revenue:

	Year Ended December 31, 2023
(in thousands)	Rent-A-Center		Acima		Mexico		Franchising		Consolidated
Store
Rentals and fees	$	1,676,238	$	1,515,189	$	70,251	$	—	$	3,261,678
Merchandise sales	122,915		415,306		3,545		—		541,766
Installment sales	63,630		—		—		—		63,630
Other	1,340		830		829		2,870		5,869
Total store revenues	1,864,123		1,931,325		74,625		2,870		3,872,943
Franchise
Merchandise sales	—		—		—		95,054		95,054
Royalty income and fees	—		—		—		24,416		24,416
Total revenues	$	1,864,123	$	1,931,325	$	74,625	$	122,340	$	3,992,413

	Year Ended December 31, 2022
(in thousands)	Rent-A-Center		Acima		Mexico		Franchising		Consolidated
Store
Rentals and fees	$	1,724,541	$	1,589,708	$	61,204	$	—	$	3,375,453
Merchandise sales	151,745		520,077		3,466		—		675,288
Installment sales	72,328		—		—		—		72,328
Other	1,250		535		210		2,980		4,975
Total store revenues	1,949,864		2,110,320		64,880		2,980		4,128,044
Franchise
Merchandise sales	—		—		—		91,350		91,350
Royalty income and fees	—		—		—		25,998		25,998
Total revenues	$	1,949,864	$	2,110,320	$	64,880	$	120,328	$	4,245,392

	Year Ended December 31, 2021
(in thousands)	Rent-A-Center		Acima		Mexico		Franchising		Consolidated
Store
Rentals and fees	$	1,762,847	$	1,701,532	$	58,074	$	—	$	3,522,453
Merchandise sales	199,781		626,166		3,275		—		829,222
Installment sales	73,585		—		—		—		73,585
Other	1,636		391		54		2,067		4,148
Total store revenues	2,037,849		2,328,089		61,403		2,067		4,429,408
Franchise
Merchandise sales	—		—		—		126,856		126,856
Royalty income and fees	—		—		—		27,187		27,187
Total revenues	$	2,037,849	$	2,328,089	$	61,403	$	156,110	$	4,583,451

Lease Purchase Agreements

Rent-A-Center, Acima, and Mexico

Rentals and Fees. Rental merchandise is leased to customers pursuant to lease-to-own agreements, which provide for weekly, bi-weekly, semi-monthly or monthly terms with non-refundable lease payments. At the expiration of each lease term, customers may renew the lease-to-own agreement for the next lease term. The customer has the right to acquire title of the merchandise either through an early purchase option or through payment of all required lease renewal terms. Customers can terminate the lease-to-own agreement and return the product at the end of any lease term without penalty. Therefore, lease-to-own agreements are accounted for as operating leases.

Lease payments received at our Rent-A-Center stores, certain Acima locations formerly operating under the Acceptance Now brand, and Mexico stores must be prepaid in advance of the next lease renewal term. Under the Acima Holdings business model, revenues may be earned prior to the lease payment due date, in which case revenue is accrued prior to receipt of the lease payment, net of estimated returns and uncollectible renewal payments. Under both models, rental revenue is recognized over the lease term. See Note D for additional information regarding accrued lease 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 lease term. At December 31, 2023 and 2022, we had $68.6 million and $71.2 million, respectively, in deferred revenue included in accrued liabilities related to our lease-to-own 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 stores, certain Acima locations formerly operating under the Acceptance Now brand, and Mexico stores is depreciated using the income forecasting method and recognized in cost of rentals and fees in our Consolidated Statements of Operations over the lease term. Lease merchandise under Acima Holdings is depreciated over the lease term using a straight-line depreciation method. Under the income forecasting method, the consumption of lease merchandise occurs during periods of rental and depreciation directly coincides with the receipt of rental revenue over the lease-to-own contract period. Depreciation under the straight-line method is recognized each period over the term of the lease-to-own contract irrespective of receipt of revenue payments from the customer.

We also offer additional optional product plans along with our lease-to-own 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 benefits in the event eligible customers become unemployed. Customers renew product plans in conjunction with their lease 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, Acima, and Mexico

Merchandise Sales. Merchandise sales include payments received for the exercise of the early purchase options offered through our lease-to-own 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 December 31, 2023 and 2022, we had $1.1 million and $2.0 million, respectively, 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 December 31, 2023 and 2022, we had $3.0 million and $3.4 million, respectively, in deferred revenue included in accrued liabilities related to franchise fees.