BBB Advises: Layaway May Be Your Answer For Christmas Shopping

BBB Serving Metro Atlanta, Athens & Northeast Georgia knows that early holiday shopping is a smart way to prepare for the season, and what better way to do that than using layaway plans. Layaway plans are a good idea, especially for customers who want to buy products without paying the full amount upfront and do not want to use a credit card. Many retail companies are now advertising layaway opportunities for their customers to help them plan for their holiday shopping.

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 beleaguered 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 the using a credit card. However, it’s extremely important that customers take note of the fine print and know what to expect.

Online Layaway:

Layaway purchase plans are not limited to brick-and-mortar retail outlets; some online merchants use them, as well. Some layaway sites operate like a combination shopping search engine and online shopping mart: The companies have hundreds of merchants and online retailers selling name brand items.

First, you select a product. Then, you pay: some sites require electronic debiting from your checking account; others require that you pay by check or money order through postal mail. Still others allow you to pay with credit or debit cards, or use online payment services. Once you’ve paid the balance, the online layaway service pays the merchant, and the merchant sends you the product.

When buying items on layaway, 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?
• Does the retailer or third-party layaway service have a good BBB rating?

Clearly understand the risks of layaway. Remember companies are holding merchandise for you that could be sold to other consumers. If you miss payments or do not fulfill the obligations agreed upon when the items were put into layaway, then you risk losing your money, the items and your holiday spirit!

One Last Thing: Let’s remember to support our Small Businesses. Besides national chains such as Walmart and Toys ‘R’ Us, don’t overlook your local retailers that might offer layaway plans too. If you decide to shop locally, it doesn’t hurt to ask if they, too, have layaway plans. Some stores will even work with you on establishing payment plans if they don’t already have a layaway plan in effect.

For companies you can trust please visit bbb.org.