Before You Put that Purchase on Layaway…

Will that be cash, credit or layaway?  Over the past 5 years, the old layaway plans have become increasingly popular, and retailers are adapting and promoting the payment option.
Layaway is an option that can help consumers who don’t have access to credit or prefer to avoid loading their credit cards during the holiday sales season.  Under a layaway plan, the merchant holds the item until it is paid off according to a set schedule of installments.  When the payments are finished, the item is yours to take home.
The main reason layaway plans are so popular is because there are no interest charges.
Connecticut Better Business Bureau is warning that consumers who don’t carefully read the fine print may get some unwanted surprises.
The terms and conditions vary from one merchant to the next.  Some require an upfront fee or a percentage of the purchase price in advance, but some merchants do not.  Some retailers also allow layaways for online purchases, while competitors may not.
Not all items are eligible for layaway plans, such as merchandise that has already been deeply discounted.  Layaways are often used to purchase appliances, electronics and furniture.
In some cases, a layaway may not be your best option.  If you miss payments and default, you will have to pay a cancellation fee and forfeit the item.  Another downside is that you are locking-in to the price of an item that may be significantly discounted as the holidays approach.
What to Know about Layaway Plans
Understand what you are getting into – You don’t want any unpleasant surprises so make sure you carefully read the paperwork.  It’s a good idea to take a brochure with the store’s layaway policy to read before signing up for a plan.
Compare layaway plans – Merchants have different options, payment schedules and policies regarding a down payments and fees.
Ask about price-matching – Many stores will match a competitor’s price if you find the same item elsewhere at a lower price.
Coupons can help – Many merchants will accept coupons, but in order to take advantage, you have to present them at the time you open up your layaway plan.  Coupons are generally not accepted for items already priced for clearance.
Questions to ask – For example, can I get a refund or store credit if I no longer want the item after a few payments?   What is the penalty for a late payment, and what happens if the item goes on sale after I’ve put it on layaway?