Many retail stores, such as Sears and Walmart, are offering a layaway option this holiday season. While there are some benefits to this method of shopping, there can also be cons. For example, once you put an item on layaway and lock in the price any sale applied to that item cannot count towards your layaway. At the same time, using layaway can be a good way to stay on budget and avoid a large credit card balance.
If you are considering layaway this holiday season, BBB has this advice:
- Plan ahead. Before signing a layaway contract, make sure you can actually come up with the money to pay for the products. Unlike outstanding credit card debt, which will just accumulate interest, failure to pay your layaway means you lose the product and your fees.
- Obtain a written contract. Ask the company for a written contract for the layaway and read it carefully. Contracts should include when payments must be made and what happens if a payment is late. Keep in mind that each company may have a different layaway policy.
- Confirm how long the item can be kept on layaway. Some stores only hold items for a specific number of months, and then return the items to be sold to other consumers.
- Ask where item(s) will be stored. Be sure your items will be safely placed in a hold area until all payments are made to avoid being sold to other customers.
- Read the company’s refund policy. What happens if you change your mind and decide not to purchase the item? Are refunds even available? Some stores might not give a refund or store credit if you change your mind about buying the item put on layaway.
Do you plan on using layaway this holiday season?