An Ebay promotion offering discounts to shoppers who paid with Klarna risked encouraging the use of buy now, pay later according to the consumer charity Which?.

Which? said Ebay's promotion offered money off to customers who paid with Klarna's Pay in 3, which allows buyers to split the cost of an online purchase into three equal, interest-free installments.

In Ebay's newsletter promoting the deal, Which? claimed the relevant disclaimer - explaining the risks of taking out buy now, pay later (BNPL) credit - did not appear on all devices. 

BNPL schemes enable shoppers to pay in installments after purchasing an item, often using informal credit agreements.

It can be used on millions of items, including from thousands of small and medium-sized businesses.

BNPL schemes, such as Klarna and Clearpay are not yet regulated by the Financial Conduct Authority. 

As a result, customers don't benefit from the same protections as regulated credit, such as Section 75 cover or access to the Financial Ombudsman Service. 

Missed repayments can also lead to late fees, a damaged credit record or even debt collection.

This isn't the first time Which? has raised concerns about retailers offering incentives linked to BNPL credit.

In 2022, it reported on promotions run by JD Sports-owned brands - including JD Sports, Size and Tessuti - which offered free standard or express delivery when customers selected BNPL at checkout.

In April 2025, JD Sports also ran another promotion, offering £10 off orders over £100 when customers paid using Klarna.

Retailers promoting BNPL products must follow advertising rules that are designed to protect consumers.

The Advertising Standards Authority told Which?: 'The advertising rules make clear ads must be prepared with a sense of responsibility to consumers and to society. 

'It's important that ads for BNPL services are responsible because these forms of payment involve borrowing money. 

'Advertisers should make sure they don't encourage excessive spending through the use of credit.'

What did Ebay do?

Ebay  promoted the BNPL deals in a newsletter in August, with the subject line: 'Save extra when you pay with Klarna'. 

Someone spending between £70 and £149.99 would receive £5 off while someone spending £550 or more would get £50 off. 

The email also encouraged shoppers to 'give your wish list some TLC and shop the things you love'.

However, Which? noticed that the email and the promotion's terms and conditions page did not clearly set out the risks of taking out credit. 

Missed Klarna repayments can lead to up to £10 in late fees, marks on your credit file, and referral to a debt collection agency.

'It's concerning that big retailers are incentivising customers to use BNPL products,' said Reena Sewraz, retail editor at Which?.

'While BNPL products can allow customers to spread the costs of larger purchases, any missed repayments can also lead to late fees, a damaged credit record or even debt collection.

'Any promotions incentivising the use of BNPL should clearly outline the risks. We'd advise shoppers to carefully weigh up whether BNPL products are right for them and make sure they aren't borrowing more than they can afford.'

What did Ebay say? 

When Which? contacted Ebay about its concerns, the company said the required credit disclosure had been clipped from the bottom of the email on some devices due to rendering issues. 

It told Which? the issue had now been corrected, with the disclaimer moved higher up in its newsletters to ensure visibility.

The statement, which Klarna requires retailers to include, is: 'Klarna's Pay in 3 is an unregulated credit agreement. Borrowing more than you can afford or paying late may negatively impact your financial status and ability to obtain credit. 18+. UK residents only. Subject to status. T&Cs and late fees apply.'

Klarna told us it provides merchants with clear guidelines to ensure that the required disclosures are present, highlighting that Pay in 3 is unregulated.

It said its purchases come with Klarna's buyer protection, which means customers will never pay for items that aren't delivered or faulty, and that it has introduced an internal complaints adjudicator as an interim step until its customers can access the Financial Ombudsman Service.