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Layaway now for later: Tips for using holiday layaway services
Online Staff Report
The current economy has left many shoppers on a budget and searching for more affordable methods of paying for big-ticket items and holiday gifts. This holiday season, many families will be turning to alternate forms of payment to make ends meet. With many stores offering layaway services, the Better Business Bureau (BBB) is offering advice about how to use this payment plan in lieu of credit cards.
Once considered a dated, old-fashioned method of payment, layaway services are back in a big way, with many businesses now shaking the dust off their layaway programs for today’s cash-strapped consumers. Buying items on layaway is different from putting them on a credit card because the buyer isn’t charged interest on the purchase and can’t take the item home until it is paid off. When purchasing items on layaway, the buyer must typically make a down payment of 10 to 20 percent and pay any service or plan fees for the store to hold the item for them. The customer then has typically 30 to 90 days to make periodic payments to pay off the balance. Once it is paid off, the customer can take the items home.
“Layaway services can be a great alternative to using a credit card,” said Dennis Horton, director of the Rockford Regional Office of the BBB serving Chicago and northern Illinois. “However, it’s extremely important that customers understand the requirements and their obligations and take note of the fine print so they know what to expect.”
As a complement to in-store layaway, some stores provide online layaway services for purchasing items through the retailer’s website. Additionally, third-party businesses have sprung up for the purpose of setting up layaway plans online between customers and retailers that don’t already have a layaway program. Once the item is fully paid for, the business then buys the item from the retailer and ships it to the customer.
When considering buying items on layaway, the BBB advises consumers to get everything in writing, and offers the following checklist of questions to ask:
• How much time do I have to pay off the item?
• When are the payments due?
• How much do I have to put down?
• Are there any storage or service plan fees?
• What happens if I miss a payment? Are there penalties? Does the item return to inventory?
• Can I get a refund or store credit if I no longer want the item after making a few payments?
• What happens if the item goes on sale after I’ve put it on layaway?
Also, visit www.bbb.org to check the Business Review of the retailer or third-party layaway service.
For more advice about how to be a savvy consumer this holiday season, visit www.bbb.org.