Progressive Rentals April-May 2006

Of Lawsuits and Legislation by Ed Winn III
APRO Launches RTOHQ by Shellie Faught
Friends in High Places by Shellie Faught
Growing with Gloria: An APROfile of Gloria Homeier-Schwien by Kristen Card

Of Lawsuits and Legislation by Ed Winn III It was T.S. Eliot who declared April as the cruelest month. Cruelty came early to the rent-toown industry this year as March saw the New Jersey Supreme Court and then the governor of Wisconsin lay waste to the industry in those two states. It was all bad RTO news in March, but in February the U.S. Supreme Court once again championed the fundamental fairness and utility of mandatory consumer arbitration as a means of resolving disputes. This article reviews all three events and their likely impact on the rental business. N e w J e r s e y : Perez v. Rent-A-Center New Jersey Supreme Court, March 15, 2006 Some background on RTO in New Jersey The rent-to-own industry has had a long, antagonistic history in New Jersey. Even before RTO came on the scene in the state, New Jersey courts were leading the way in the development of such pro-consumer doctrines as unconscionability and products liability.

Some of the first cases ever decided against businesses using these new-atthe- time legal doctrines were in New Jersey courts, a fact to which New Jersey jurists point with pride. The first RTO case to find its way into a New Jersey state court was Green v. Continental Rentals Inc. in 1994. The trial court judge concluded that traditional rent-to-own agreements were retail installment contracts under state and federal law because courts must look beyond the form of a transaction and get to the substance of it—the “economic verity of the transaction” in the judge’s words. The RTO agreements were also “unconscionable” according to the judge in Green. Before that ruling could be appealed, the rental company went out of business. Soon thereafter, a spate of lawsuits was filed against several different rental companies, perhaps the most noteworthy of which was Robinson v. Thorn Americas Inc. (1994).

The judge in the Robinson case certified the class as including all customers of the company who had rented anything going back six years and held that the decisions in Green and a couple of other trial courts were the law in the state for RTO transactions—the decisions being that they are retail installment contracts under the New Jersey Retail Installment Sales Act (RISA). The judge in Robinson made additional rulings from the bench that allowed the parties to calculate damages in the case, which were in excess of $120 million. Thorn Americas—then parent company of Rent-ACenter— settled Robinson and litigation pending against two other companies, Crown Leasing Corp. and Renters’ Choice Inc., that Rent-A-Center had acquired while their cases were pending for $60 million in 1998. Then Rent-ACenter changed its rental agreements in New Jersey by adding a fair market value balloon purchase option at the end of the rental term.

Rental customers paid rent for possession and use of the product, but before they could obtain ownership, they had to purchase it for its estimated fair market value. The legal theory was that if customers always had to pay the fair market value for the property in order to own it, then any payments previously made must have been for the use of the property only and cannot have been part of the purchase price. Therefore, the transaction, taken as a whole, cannot be a retail installment contract. Rent-ACenter has done business in New Jersey with balloon purchase option rental agreements from late 1998 until now.

The Perez case and holding It is important to understand the facts in Perez. While they may not have dictated the Supreme Court’s decision— New Jersey’s very liberal jurisprudential history can be held responsible for that—the facts certainly did not help. The chart below summarizes the history of Perez’s rental transactions with Rent-A-Center: The totals are eye-popping. Perez was making rental payments of $744 per month, not including “other fees” and taxes. The total rent-to-own price for all of the merchandise, including the balloon purchase option, was more than $18,000. Perez was described in an amicus brief filed by a consumer advocacy group as “a low-income cook who receives food stamps.” Indeed, few traditional RTO customers could afford weekly rental payments of $173 for very long. When she had paid more than $8,000 on her agreements, she quit paying.

Rent-A-Center sued her in small claims court for damages and return of the merchandise. Rent-A-Center had not been paid the cash price totals for the items Perez had rented, but almost certainly had recovered its cost of goods, if one assumes a three-to-four-turns pricing formula on most of the items. When Perez got served with the Rent-A-Center lawsuit against her, she went to a lawyer and she countersued Rent- A-Center on her own behalf and “for all those similarly situated”— a class action complaint—for violations of New Jersey’s RISA and the state Consumer Fraud Act. The trial court, recognizing the economic and legal importance of the balloon purchase options in Rent-A-Center’s rental agreements, ruled in favor of Rent-A-Center and dismissed Perez’s lawsuit altogether. Perez appealed, claiming that the trial court erred when it dismissed her suit. The court of appeals upheld the dismissal of Perez’s claims and in a detailed written opinion explained why Rent-A-Center’s rental agreements with balloon purchase options were not retail installment sales under state law. Perez appealed to the state Supreme Court, which took the case, heard arguments last November and issued its six-toone opinion reversing the appeals court on March 15, 2006.

The supreme court held that Rent-A-Center’s rental agreements with the fair market value balloon purchase options are retail installment contracts as defined in the state RISA, because the court’s obligation is to “interpret the statute reasonably to serve it apparent legislative purpose.” That purpose, according to the court is “the protection of the public interest through the regulation of charges associated with the time sale of goods.” After admitting that the transactions in the lawsuit did not fit neatly within the definitions in the statute, the court explained that “questions regarding the applicability of the statute must be resolved in favor of consumers for whose protection RISA was enacted.” To reach this conclusion, the court had to ignore the plain language of the statute requiring an obligation on the part of the consumer to make payments—and it did so.

The court concluded that Rent-A-Center’s agreements were “conditional sales,” a term included in the definition of retail installment contract, but nowhere defined. The court attached no importance to the no-obligation feature of the agreements, because Perez argued that this feature was of no value to her, since she intended to own everything, an argument that the court adopted. What is curious is that the court made vague reference to “studies, including those by Rent-ACenter, [that] have concluded that between 64 percent and 70 percent of all rent-to-own merchandise is ultimately purchased by the customers.” The court also cited the 2002 FTC study to support this finding. There was never a trial in Perez. No witnesses ever got on the stand. No expert witnesses were ever cross-examined and so this evidentiary conclusion is difficult to understand. However, it helped the court get to the answer it wanted in the lawsuit: “[Our decision] is bolstered by the fact that the majority of rent-to-own contracts are intended for and in fact result in ownership, not cancellation.

To exclude the many purchasers from the protective sweep of RISA by providing a cancellation that few would exercise would be an intolerably narrow interpretation of the statute limned for consumer protection purposes.” This finding is all the more curious since in other lawsuits where evidence was tested in court, the Rent-A-Center keep rate has consistently been under 35 percent. It appears as if the court is reaching conclusions based on findings not in evidence, but that does not make the ruling any less binding on Rent-A-Center. If such an error had occurred in a lower court, Rent-A-Center could appeal to a higher court, but in this instance, with only state claims at issue, the New Jersey Supreme Court has the last word. This is not the first time, certainly—nor will it be the last—that a court misconstrues the facts of a case to support the conclusion that it wants to reach. The court went on the hold that the interest rate cap of 30 percent in the New jersey criminal usury statute applies to Rent-A-Center’s rental transactions and made the finding that the entire amount between the cash price and the total of payments for ownership, including the balloon, is interest.

Finally, because all of the Perez agreements have an undisclosed interest rate greater than 30 percent, the court found that the Consumer Fraud Act applies to all of the transactions. That means that the company may be liable for treble damages under certain circumstances. By its terms, the criminal usury statute applies only to loans of money. Not any more. After Perez, the statute applies to any transaction with an interest rate or a finance charge. In one fell swoop, the court did away with the 200- year distinction between usury limits on loans of money and finance charge limits on time price sales of goods. The majority view in the country is that these two kinds of transactions are fundamentally different and nearly every state has different rules for loans than for sales of goods. The court sent the case back to the trial court where there will now be a trial on the amount of damages that Rent-ACenter must pay for its multiple violations of these several state statutes. When Rent-A-Center settled the Robinson case for $60 million, it had 22 stores in New Jersey.

Now, according to the New Jersey Supreme Court, the company has about 50 stores in the state.While the record is not sufficiently complete to make any realistic estimates of the cost of this suit, it can fairly be predicted that Perez will cost Rent-A-Center tens of millions of dollars. In addition, it will require Rent- A-Center, and perhaps other rental dealers in the state, to alter their business practices in substantial fashion. A similar situation arose a few years ago in Wisconsin when Rent-A-Center and most other rental dealers in that state had to begin offering transactions that complied with the Wisconsin Consumer Act, that state’s version of a retail installment sales act. The difference is that in Wisconsin, there is no limit on finance charges. The difference between the cash price and the total price for ownership in Wisconsin can be any amount that is agreed to by the parties, with the proviso that it must be disclosed as an interest rate. The challenge in New Jersey will be for rental companies to craft transactions that fit under the 30 percent interest rate cap.

Rental dealers may have some leeway in setting cash prices, but they may have to quit offering some lowerend electronic products that are heavily discounted in the retail marketplace. Outside of New Jersey, the Perez decision has no real legal influence. It is a state court interpreting its own state’s statutes and the precedential value of the opinion stops at the state line. It is true that sometimes court opinions are so powerfully and insightfully crafted that courts in other jurisdictions are so swayed by the force and beauty of the arguments that they choose to follow the decision even though not required to do so. Perez is no such case. The decision gives succor to consumer advocates everywhere. New Jersey Public Interest Research Group have crowed often and publicly that Perez “is a complete and total victory for consumers.” The industry can fairly expect some negative press from the decision. When Robinson was settled, the New York media picked up the story and several hostile pieces on the industry were aired nationally. What is not likely is any unraveling of the time-tested rent-to-own statutes that are firmly in place in 47 states.

The decision effectively killed any further consideration of the bill labeled “New Jersey Rental-Purchase Consumer Protection Act” that was wending its way through the state house in Trenton. The bill’s Senate sponsor, himself a former vigorous and effective consumer advocate in state government and still a staunch supporter of his bill, has indicated that he cannot move the bill in the current political climate in the aftermath of Perez. This latest bill is part of the industry’s effort to get a rent-to-own statute in New Jersey that has been ongoing since 1988. W i s c o n s i n : Vetoing a rent-to-own bill The other bad news that rained down on the industry in March came from the governor’s desk in Wisconsin. Governor Jim Doyle has previously served the state as attorney general and in that role bedeviled the rent-to-own industry in the state for years by extracting a series of settlements from rental companies there totaling more than $25 million. One rental company agreed to a settlement with Doyle’s attorney general’s office of “only” $500,000 and the company’s agreement to shutter its store locations and leave the state. In addition, there had been a number of private class action lawsuits brought and in every one, the Wisconsin courts ruled against the industry.

The charges have always been that RTO transactions, however configured, are disguised retail installment contracts under the Wisconsin Consumer Act, one of the earliest and still one of the most comprehensive consumer protection statutes in the country. Attorney General Doyle was a strident and vocal critic of the industry in the state. He sent his deputies to Washington,D.C., to testify against pending RTO legislation in 2001. Wisconsin rental dealers have been seeking safeharbor legislation in Madison on and off since 1981. Once before, in 2001, a Wisconsin governor, this time a Republican and Doyle’s predecessor, vetoed rent-to-own legislation that the industry was supporting. The veto occurred late in an election year and the sitting governor lost the next election to Doyle. Despite Doyle’s previous pronouncements against the industry while attorney general, the industry approached him in his new role as governor soon after his election and he indicated that if he got a good bill from the legislature he would sign it.Wisconsin rental dealers worked closely with the governor’s office to craft a bill that would satisfy the governor’s concerns about industry practices. It was that bill, blessed by the governor’s staff, that the dealers finally worked through the legislature this spring.

Once the bill got to the governor’s desk after close votes in both houses and tons of negative press about the evils of rent-to-own, Wisconsin rental dealers thought that the governor was merely waiting for some of the heat over the issue to dissipate and then he was going to sign the bill into law. It was a crushing blow to the dealers in the state to learn that the governor had vetoed the bill. Once again, the governor’s actions will only finally be felt in his own state.Wisconsin remains one of the few remaining redoubts against the RTO industry. And so, as much as rental dealers might wish their business were respected or at least tolerated everywhere, such is not the case today. Opposition has become concentrated in Minnesota, Wisconsin and New Jersey. Opposition exists elsewhere, to be sure, but elsewhere there is fair and balanced rent-to-own legislation on the books. These laws reflect the negotiated compromises made by rental dealers on the one hand and reasonable consumer advocates on the other. It is not true that Wisconsin and New Jersey have captured all of the rabid consumer advocates in the country. It only seems that way for the moment.

There are plenty of unreasonable consumer advocates everywhere, but lately, they have turned their ire toward what they view as other, more egregious examples of capitalism run amuck, like the payday loan industry. As painful as these two events are, coming so close together, they are perhaps useful scourges for rental dealers everywhere against the tendency toward hubris. After long, quiet, successful spells of running businesses, a certain complacency can set into any business. Dealers are cautioned to remember that they do not have a divine right to run their businesses. They do so only with the permission of the government— and that permission can be granted or withdrawn at any time depending on the political winds of the moment. It is important that rental dealers everywhere not to forget that truth. U . S . S u p r e m e C o u r t : Favoring mandatory consumer arbitration Rarely is the news all bad, unless you are a sitting president. In addition to the bad news coming out of New Jersey and Wisconsin, good news came out of the U.S. Supreme Court this February when it ruled once again in favor of mandatory consumer arbitration in Buckeye Check Cashing v. Cardegna. This was a case arising from the payday loan industry and is one that offers some comfort and pleasant legal prospects to the rent-to-won industry. In Buckeye, the plaintiff filed a class action lawsuit against a payday lender in Florida state court alleging that his loan was usurious under Florida law, violated several other state laws, was illegal on its face and therefore void. The loan agreement contained an arbitration provision allowing either party to compel arbitration to resolve any disputes that might arise between the debtor and the creditor out of the loan transaction.

The trial court denied the lender’s motion to compel arbitration and the Florida Court of Appeals reversed, holding that the arbitration provision controlled the dispute. The Florida Supreme Court reversed the court of appeals and sent the case back to the trial court. Finally, the U.S. Supreme Court agreed to consider the case and in February ruled that arbitration was indeed the proper forum for resolving the plaintiff ’s claims against the lender. The Supreme Court repeated some the supportive comments about the Federal Arbitration Act, which “embodies the national policy favoring arbitration…” The specific holding in Buckeye is that a mandatory arbitration provision in an agreement with a consumer as a party is enforceable against challenges to the validity of the underlying contract. The Supreme Court has been consistent in several previous rulings that mandatory consumer arbitration provisions are an acceptable mechanism for resolving disputes that arise out of the contract as long as the arbitration process itself does not violate due process.

The arbitration must not be too expensive for the consumer; the arbitrator must be competent and unbiased; the location of the arbitration must be reasonably convenient to the consumer; and certain procedural safeguards must be in place during the process. The three major national arbitration tribunals in the United States—the American Arbitration Association, the National Arbitration Forum and Judicial Arbitration and Mediation Services (JAMS)—all have such procedures in place in their codes of procedures for consumer arbitrations. The clear message for rental dealers who worry about legal issues, class action lawsuits and the like, is to add arbitration provisions to their rental agreements. If they make sure that the process for arbitrating disputes is fundamentally fair for aggrieved consumers, then the chances are good that the provision will work almost everywhere, giving both sides a quicker and less expensive resolution to their disputes and protecting the dealer from the specter of defending a class action lawsuit. Even in a perfect storm like the deluge that descended on rent-to-own in March, there is always a silver lining.

APRO Launches RTOHQ
by Shellie Faught

RTOHQ If there is one thing that’s unique about the rent-to-own industry, it is the willingness of its members to share information amongst themselves for the good of the industry. For 26 years, the Association of Progressive Rental Organizations has been instrumental in connecting independent rental dealers and fostering conversation and networking across the country. Now, with a newly redesigned Web site and a new industry portal, APRO is bringing that value to the Internet. If you’ve logged on to APRO’s Web site recently, you may have noticed a few changes. On March 20, APRO unveiled RTO Headquarters, or RTOHQ for short. Beginning in April, traffic from the former APRO Web site, APROVision.org, was redirected to RTOHQ’s URL (www.rtohq.org). According to APRO Executive Director Bill Keese, the overhaul of the site is a move toward the completion of APRO’s strategic plan. “The new Web site is part of our approach to raise awareness of APRO’s Web presence,” says Keese. “Most of our visitors may be industry professionals, but we want enough public information on the site so that the public, the press and especially potential customers can understand the benefits of the rent-to-own industry.” The new Web site was designed around three key qualities: ease of navigation, breadth of information and timeliness.

As a result, RTOHQ features a design that is more user-friendly than its predecessor, APROVision. Drop-down menus offer users more efficiency and every page on the site is accessible from the drop-down menus on the home page or from any other page on the site. Basically, it’s easy to read,” says APRO Communications Chair Larry Carrico. “You have all the information you need to navigate the site right on the front page. There’s nothing tricky about it. It is based on the needs of the public and our members.” However, RTOHQ isn’t about looks alone. APRO’s new home on the Web includes E-Communities, a portal that allows users to interact. By logging in to ECommunities, users have the option of subscribing to different groups, or “communities,” related to APRO and the rent-to-own industry.

Once a user subscribes to a specific community, he/she is given access to the resources contained within that community. Each community offers employees, vendors and owners access to a wealth of information and rent-to-own resources. For instance, APRO members who subscribe to the APRO member community will have access to APRO member forums, member announcements and documents such as manuals and registration forms. More important, E-Communities offers a place for everyone in the industry to network and discuss rentto- own issues with others. The APRO E-Communities section presents the industry with a unique online networking opportunity. On the E-Community forums, participants can discuss industry trends, get advice on issues specific to their store or share ideas about products or marketing. “Our ability to share information amongst ourselves to better ourselves and one another is something that is specific to the rent-to-own industry,” says Carrico. “That’s the biggest value APRO brings to its membership.”

In addition to the new features, the redesigned Web site offers a change in content. Unlike APROVision, RTOHQ will offer the most important news on the home page of the Web site. Industry news from legislative breakthroughs to new store openings will be available on a daily basis. As a result of the changes, APRO’s Rental Viewpoint will be changing as well. Beginning this summer, APRO will send out a collection of the top industry headlines each week. But if you don’t want to wait, there’s also the opportunity to subscribe to an RSS feed of updated content. This will deliver industry headlines to your news reader service as soon as it is posted on the APRO site. With the launch of RTOHQ, Carrico hopes to share the good news about rentto- own with the public. “The main goal is to have the external and internal functions of the site working together,” says Carrico. “In today’s world, you need both.We need the internal to communicate amongst ourselves and to share tips and foster community. We need the external to show the rest of the world what a great community rent-to-own has.

Friends in High Places
by Shellie Faught Thirteen years after rent-to-own industry leaders staged their first legislative conference, nearly 50 APRO members

and rental dealers returned to Washington, D.C., in February to share their enthusiasm for rent-to-own legislation with federal representatives. The 2006 Dave Egan Legislative Conference offered a new format—an educational morning seminar before Capitol Hill visits followed by an evening grassroots networking dinner—and record-breaking attendance.
“I was extremely pleased with the format this year,” says APRO Government Relations Committee Chair John Raines. “So far, attendee response to the networking and instructional time has been positive.”
The conference began on February 28 at the L’Enfant Plaza Hotel. ColorTyme CEO Robert Bloom kicked off the conference at the general session with a presentation reminding attendees that a positive attitude—believing in self, recognizing opportunities everywhere, persistence in focusing on solutions and always looking for the good in things—plays a key role in the success of one’s business and in the industry’s goals.

After the general session, attendees met with their representatives and senators on Capitol Hill in individual meetings. Their goal was to share an important rent-to-own message— that a federal rent-to-own transaction definition would benefit small business, the economy and the three million customers who use rent-to-own annually. After a full day of work, attendees were treated to dinner at Top of the Town in Arlington, Virginia. The location provided a bird’s-eye view of D.C.’s monuments and fostered a great deal of discussion about the productiveness of the day’s meetings. Following this networking event, attendees were taken on a “Washington After Dark” tour of famous capital sights. On March 1, some dealers returned to Capitol Hill to conduct further meetings with representatives.

A few took the time to meet at the hotel and plan the new format of the industry statistical survey in order to make sure this year’s results provide the most pertinent and usable information for APRO’s members. The number of attendees increased over the 2005 legislative conference. Out of the nearly 50 participants, 11 were first-time attendees. “I am especially delighted with all of the ‘new blood’ working on APRO’s legislative efforts,” says Raines. “The new participants certainly raised the enthusiasm of the whole group.” APRO also welcomed some special guests to this year’s conference. While attendees came from far and wide, none came quite so far as Stephen Emmer. Emmer is an exchange student from Berlin, Germany, and is the house guest of John Spangle and his wife in Friendswood, Texas. “I wanted Stephen to experience the sights of our nation’s capital as a part of his exchange experience,” says Spangle. And APRO President Shannon Strunk isn’t wasting any time introducing his and his wife, Cynthia’s, granddaughter to the legislative process. Two-year-old Kaitlyn Wood went with her grandparents and mother, Lauren Wood, to meetings on Capitol Hill.

Whatever the age or nationality, one thing that attendees took away from this year’s event is the importance of the legislative process. “An annual trip to Washington helps cement our ties on the Hill,” says Raines. “I cannot stress how important it is for APRO members to develop relationships with their representatives and senators. Recently, longtime APRO member Gary Romine reminded me that ‘you don’t start looking for a friend when you need one. You better make friends ahead of time.’”

Growing with Gloria: An APROfile of Gloria Homeier-Schwien
by Kristen Card

For Gloria Homeier-Schwien, a full house is nothing new. A native Kansan, born and raised, she went from being one of four children to having seven of her own. Yes, seven. And with her master’s degree—yes, her master’s degree—in human resource management and organizational development from Wichita’s Friends University, Homeier-Schwien helped support her family, working as a county executive director for the U.S. Department of Agriculture’s Farm Service Agency. For 15 years, she implemented farm programs for the federal government. And yes, it’s as tedious as it sounds.qWhich is why, once her youngest had reached 15 and Homeier-Schwien had reached her limit, she decided it was time for a change. q “When I got bored working for the government— because it’s not a real challenging job once you get past the first few years,” Homeier-Schwien explains, “I decided I wanted to make the move and go out on my own.”

Homeier-Schwien’s parents, Richard and Ann Cross, had been involved in rent-to-own for more than a decade, owning five Hometown Brand Center stores located in central Kansas and south-central Nebraska. Her dad had been managing a Sears store, but when Sears consolidated and the store closed, Richard and his wife decided rent-to-own was the way to go, and opened up their first store in 1990. “I had worked in my mom and dad’s store, but not much,” Homeier-Schwien confesses. “But I was attracted by the challenge of rent-to-own. You can get up every day and there’s always something exciting out there and the opportunity to work with so many different people at so many different levels. There’s always a new challenge.” Homeier-Schwien, who lives in Russell, Kansas (known for being the hometown of former U.S. Senator Bob Dole), chose Beloit—about a 90-mile commute—as the site of her first store, in order to avoid direct competition with her parents’ Russell location. And, with their support, guidance and encouragement, Homeier-Schwien opened her doors for business in 2001, under a company name she felt completely comfortable with: A Full House. Five years later, A Full House is three stores strong, going on five; stores are thriving in Russell, Pratt and McPherson, with new stores recently opened in Clay Center and Manhattan. Homeier-Schwien says her business’ growth has been dictated mostly by that old, familiar feeling.

“What got me to the second store was that my first store manager was doing so well that she had outgrown the need for me to be there,” she says. “She was an extremely independent person and took on all the responsibilities of the store, so it was time for me to move on.And when the other stores were financially stable and had good store managers in place, then I moved on, and just keep moving on.” Just as her company’s past pattern of growth has been somewhat organic, so is Homeier-Schwien’s goal for future growth. “My goal is simply to continue to open new stores,” she states. “I’d like to be the largest rent-to-own business owned by a woman, but I don’t know what the largest one is right now, so I’m not sure what that magic number [of stores] is. I just intend to keep on growing. “If you want to continue to grow, then you have to be the kind who never wants to get comfortable,” continues Homeier-Schwien. “You have to be willing to always change, always explore new ideas, always do different things. If you get comfortable, then the guy next-door might catch up with you, so don’t get comfortable in this business, because there’s a lot of competition out there.” Homeier-Schwien says a secondary motivation behind her growth goal is building a business big enough so that family members interested in it can become involved in it. “If everybody wants to come into the business, then I’ve got to have a place for them to go!” laughs Homeier-Schwien.

Three of her younger children already work for her: daughter Memory, 26, performs accounting and administrative duties from a home office; Destinee, 23, manages the Pratt store; and Bobby, 20, oversees the company’s lease-service division, traveling from store to store to take care of service issues and update personnel on training.Her three oldest—Justin, Nichole and Tia—have their own separate careers, while Rachael, 21, is studying psychology at Kansas University. Already a youthful grandmother of four, 48-year-old Homeier-Schwien clearly took on mass motherhood at an early age. Though her first marriage didn’t work out, Homeier-Schwien learned some valuable lessons from it—some of which she believes have helped foster her success in the rental-purchase industry. “I think starting so early in life helps me understand where a lot of rent-to-own customers are coming from,” she explains. “I spent a lot of years as a single mother with five children, so I know the financial constraints some of our customers are under. They come to rent-to-own because it fits their budget so well, and I can understand how it can be the only resource that fits their budget. I’ve been in that financial position before, and I can relate to their thought process.”

Not surprisingly, Homeier-Schwien cites a solid financial plan as essential for continuing success and growth. Another key piece of A Full House’s success is its one-stop-shop approach, which is especially important with the rural folks who make up much of the company’s customer base. Product selection reflects this approach, with stores offering furniture, appliances, electronics and computers, as well as honoring frequent special orders. Payment options are vast and varied, too. “We like to run the whole gamut,” says Homeier- Schwien. “When you come into one of our stores, from day one, you can do a retail sale, 90-days-same-as-cash, rent-to-own, payday loans, phone service.We’re going to find a payment plan that suits your needs. If you can pay cash, then that’s great; but if not, then we’re going to find something that fits your needs.” Despite its diversity of available options, Homeier-Schwien says about 90 percent of the company’s business rests upon rent-toown, where the name of the game is service, service, service—for both customers and the products they select. “We have immediate service,” asserts Homeier- Schwien. “If something goes wrong with your product, we don’t have to call off-site service people; we can get out there the same day and take care of the issue. It’s immediately remedied, and you’re not without the use of a product for even 24 hours.

It’s a big concern among our customers— if they’re paying for it, then they want it running right now and working well. “And of course, customer service is critical,” she continues. “When a customer comes in the door, we greet them immediately—and not just by asking them, ‘What are you looking for today?’ because people’s canned answer is, ‘I’m just looking around,’ but by getting to know that customer when they walk in the door. Getting to know what they do or about their family or something to strike up a conversation and not just immediately try to hit them with the sale. If you get to know a little about them, then you get to know what products will meet their needs.” While customer service is the company’s top priority, Homeier-Schwien considers it her personal responsibility to take care of her employees first and foremost. “My philosophy is, you take care of employees first,” she declares. “If I take care of my employees well, then that’s reflected in their customer service, and in the way they take care of my business for me.

It’s how you bring people on board and how you treat them that follows through. If you take care of employees first, then they take care of you, and the rest will fall into place.” In addition to traditional benefits and incentives, employees of A Full House enjoy a sociable sort of family oriented team environment. Homeier-Schwien maintains an open-door policy, offering a listening ear and free advice whenever it’s sought. And employees from all three stores get together for an annual camping trip at nearby Lake Wilson; according to Homeier- Schwien, the outing has yet to glean less than 100 percent turnout. Homeier-Schwien, a self-described “people person,” enjoys a spirit of camaraderie, whether it’s among her family members, her colleagues, or her contemporaries within the rentalpurchase industry. Which is why Homeier-Schwien made sure A Full House was a member of the Association of Progressive Rental Organizations from day one. “I had some involvement with APRO prior to getting into rent-to-own because my mom and dad took me to a couple of the conventions with them,” remembers Homeier-Schwien. “But once I went into business on my own, I listened so much more intently, because the people there have been in business for a lot of years; they’ve gained their level of success and maintained their level of success through making a lot of the right choices.

So it’s very valuable to listen to what they have to say.” A few years ago, Homeier-Schwien and some of her Kansan colleagues considered revitalizing the state’s trade association for rental dealers, but the movement never materialized. Last year, though, Kansas and other surrounding states were invited to merge forces with the Missouri Rental Dealers’ Association—by all accounts a well-put-together and active group that turns a decade old this year—for the mammoth Heartland of America Regional Trade Show. A multi-state success, the event’s 2006 encore is scheduled for mid-June. Meanwhile, some Kansas rental dealers, including Homeier-Schwien, plan to meet with their own state lawmakers and begin building those relationships. “We want them to know the rental-purchase industry brings millions of dollars of business into the state,” Homeier-Schwien elaborates. “We want to let them know who we are, so that if there’s ever an issue, then they already know who they can call.” Homeier-Schwien also attended APRO’s Dave Egan Legislative Conference for the first time this year, accompanied by daughter Destinee, “so she can learn the importance of [APRO] early,” says Homeier-Schwien. “For a rent-to-own dealer, [APRO] is extremely important,” she continues. “Where else are you going to glean all that knowledge? The legal knowledge, the knowledge of all the other dealers, somewhere to talk to all your vendors? Here in Kansas, where am I going to go to get all that? It’s not available.

There’s nowhere else you can go and have all those resources right there for you.” “One of my professors once told me, ‘If you want to stay ahead of the game, then you’ve got to be willing to get up earlier and work harder,’” Homeier-Schwien recalls. “And if you want to continue to grow, then you’ve got to be willing to put in the extra hours. Luckily, I don’t like to get bored; I like to stay very, very busy.” Asked what her average work week is like, Homeier-Schwien answers plainly, “Long.” Her work days, she confesses, tend to extend into evenings at home, with many nights spent up on the computer checking her stores’ progress toward company goals. Homeier-Schwien’s husband, Jim, for better or worse, also works long hours as a grain and cattle farmer. Raised on a farm in a farming family, Jim still works alongside his father and brother daily, from sunup to sundown. “He’s well-suited for the farm and is very happy with it,” notes Homeier-Schwien. “And our jobs, hour-wise, match pretty well. He’s very supportive of what I do—or I wouldn’t be able to do it.” That sort of familial support seems to be an essential ingredient for Homeier-Schwien—something that feeds her drive to succeed, something she has always needed and feels grateful to have always received. “My parents definitely encourage me to continue to grow and succeed at everything,” she says. “They press me toward success, and yes, they’re very proud of me. “I was raised with the belief that I could do anything in life, regardless of your gender or anything,” she continues. “My parents never drew limitations, and it helped me become the person I am. I’m proud of where I’m at right now; I’ve exceeded my goals, and earlier than I expected. I think it’s because that philosophy has followed me—the sky’s the limit, because nobody ever told me otherwise.”