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Receivables and Allowance for Doubtful Accounts
 12 Months Ended
Dec. 31, 2024
Receivables and Allowance for Doubtful Accounts [Abstract]  
Receivables and Allowance for Doubtful Accounts Receivables and Allowance for Doubtful Accounts
Installment sales receivables consist primarily of receivables due from customers for the sale of merchandise in our retail installment stores. Installment sales receivables associated with the sale of merchandise at our Get It Now and Home Choice stores generally consist of the sales price of the merchandise purchased and any additional fees for optional services the customer has chosen, less the customer’s down payment. No interest is accrued and interest income is recognized each time a customer makes a payment, generally on a monthly basis. Interest payments received on installment agreements for the years ended December 31, 2024, 2023 and 2022 was $10.3 million, $11.4 million, and $12.1 million, respectively, included in our installment sales revenues in our Consolidated Statements of Operations.
Trade and notes receivables consist of amounts due from our lease-to-own customers for lease renewal payments and past due uncollected lease payments, adjusted for the probability of collection based on our assessment of historical collection rates and length of time the receivable is past due; amounts owed from our franchisees for inventory purchases, earned royalties and other
obligations; and other corporate related receivables. Credit is extended to franchisees based on an evaluation of each franchisee’s financial condition and collateral is generally not required. Trade receivables are generally due within 30 days.
Receivables consist of the following:
 December 31,
(in thousands)20242023
Installment sales receivable$60,242 $62,901 
Trade and notes receivables(1)
109,486 62,358 
Total receivables169,728 125,259 
Less allowance for doubtful accounts(2)
(13,290)(14,254)
Total receivables, net of allowance for doubtful accounts$156,438 $111,005 
(1) Trade and notes receivables includes accrued revenue, adjusted for the probability of collection, related to our lease-to-own agreements of $51.1 million and $36.8 million at December 31, 2024 and 2023, respectively, including $46.6 million and $31.7 million related to lease-to-own agreements for Acima Holdings and $3.6 million and $3.3 million related to lease-to-own agreements for RAC at December 31, 2024 and 2023, respectively.
(2) Lease receivables are accrued on a net basis, adjusted for the probability of collection based on our assessment of historical collection rates, as described above. Therefore, we do not maintain a separate allowance for doubtful accounts related to our lease receivables.
We have established an allowance for doubtful accounts for our installment notes receivable. Our policy for determining the allowance is primarily based on historical loss experience, as well as the results of management’s review and analysis of the payment and collection of the installment notes receivable within the previous year. Our allowance is adequate to absorb all expected losses. Our policy is to charge off installment notes receivable that are 120 days or more past due. Charge-offs are applied as a reduction to the allowance for doubtful accounts and any recoveries of previously charged off balances are recognized as contra-bad debt expense in our Consolidated Statements of Operations.
The allowance for our Franchising trade and notes receivables is determined by considering a number of factors, including the length of time receivables are past due, previous loss history, the franchisee’s current ability to pay its obligation, and the condition of the general economy and the industry as a whole. Trade receivables that are more than 90 days past due are either written-off or fully reserved in our allowance for doubtful accounts. Payments subsequently received on such receivables are recognized as contra-bad debt expense in our Consolidated Statements of Operations.
The allowance for doubtful accounts related to Franchising trade and notes receivables was $2.2 million and $1.2 million at December 31, 2024 and 2023, respectively, and the allowance for doubtful accounts related to installment sales receivables was $11.1 million and $13.0 million at December 31, 2024 and 2023, respectively.
Changes in our allowance for doubtful accounts are as follows:
 Year Ended December 31,
(in thousands)202420232022
Beginning allowance for doubtful accounts$14,254 $13,214 $8,479 
Estimated uncollectible payments and returns(1)
19,350 25,869 24,658 
Accounts written off, net of recoveries(20,314)(24,829)(19,923)
Ending allowance for doubtful accounts$13,290 $14,254 $13,214 
(1) Uncollectible installment payments, franchisee obligations, and other corporate receivables are recognized in non-labor store operating expenses in our consolidated financial statements.