A generation gap may exist among those who are and are not aware of layaway. Growing up, it was a way that my family routinely bought for Christmas, birthdays and other events, instead of using a store credit card. Layaway has once again made a comeback as an alternative to store credit cards as the economy experienced its freefall and subsequent sputtering recovery.
Things to know
Layaway typically abides by the same principles across retailers. That is to say you will be charged a purchase price, a service fee, make a down payment, and have specific terms of payment, as well as a fee if you decide to cancel the agreement. Additionally, know that you will not receive the items being bought under the agreement until you make your last payment. While that is true, you will be able to enjoy the benefit of a sale price that may
otherwise be long gone when you make your final payment.
Generally speaking, the fees that are assessed will be far lower than that charged by credit card companies in the form of interest.
How Layaway Works
A customer identifies the items they would like to purchase that qualify according to the retail establishment. The customer will then sign a document stating they agree to pay a set amount for a specific period of time (can be days, weeks, or months) until the balance is paid in full. The retailer will then hold the items back until the
customer fulfills the layaway contract. At the point the customer makes the final payment, they will then receive the items.
Benefits of Layaway
There are certainly benefits to using layaway. Layaway can be a mechanism for a customer to make a purchase for an amount that they do not have at a given time, but could purchase over a defined period of time.
Most retailers will offer a cancellation policy that allows you to cancel your purchase for a fee, and receive what you had previously paid either in cash or a store credit. Another benefit is that you are not going to be charged interest on your purchase at a later date. One of the greatest pitfalls of credit cards is people making minimum
payments and being forced to pay exorbitant interest rates, as well as other fees. The beauty of layaway is that the day you make your agreement to purchase the item(s) you know what the cost will be.
Finally, to enter into a layaway contract, your credit will not need to be checked. That means that if the economy has been especially hard on your family, you will not be penalized.
Make an Inquiry
If you would like to make a purchase through a layaway program there are several ways to find out if your retailer of choice participates. You can check through their website, you can call the exact location, you can ask an associate, and you can check along the back wall of a store (a typical location).
While layaway is not for everyone, it can certainly be an invaluable purchasing tool, especially around the holiday season.