Understand the Rules of Layaway Shopping — November 2012

In recent years, retailers have brought back the concept of layaway shopping.  For many households it’s a way to stretch out payments on merchandise they want to purchase for the holiday season.  Items are selected at the store, and kept at the store while regular payments are made on the merchandize.  The best part for the shopper is that their item is paid for before they take it home.  It can be one  tool for managing spending and not going into debt.

However, the shopper needs to understand the rules of the layaway.  They will differ with each retailer offering the service.  Often they entice the shoppers to start early by dropping certain fees for shopping between certain dates.  Each retailer can charge a different fee.  Some can be as high as 5% of purchase price of the total layaway.  Others might charge a flat fee, say $5, which isn’t refundable.

Some fees are per purchase.  This means that if you decide at a later date to add on to your layaway purchase another fee is charged.  Layaway purchasers also need to know if there is a cancellation fee, which could be $5 to $15 dollars, depending on the retailer.

It’s worth asking if there will be a price adjustment if the item put into layaway goes on sale for a lower price.  This could happen for items put on layaway before the December sale season.  You may not get the adjustment but if it’s a popular item, you do have the item.

Layaway shopping can be a method to take the debt stress out of holiday purchasing, but check the rules of layaway ahead of time.