Consumer Handbook: Understand The Layaway Agreement Before You Buy Presents For The Holidays

Nov 25, 2019

Credit Better Business Bureau

National retailers like Walmart, Kmart, Sears, and Burlington Coat Factory are

again offering layaway programs to help shoppers afford big purchases. 

Better Business Bureau advises consumers to read and understand a store’s layaway contract before agreeing to place items on layaway. Otherwise, they could be surprised by fees or other charges that could add to the cost of their purchases. 

Layaway service lets a buyer space out payments on an item over time without using a credit card. A buyer claims the item only after the full purchase price has been paid. Some consumers prefer layaway because they are charged no interest on the payments. When they’re buying a present that will be given in the future, it’s not important to take the item home right away. 

Third-party businesses also have sprung up, offering layaway plans for merchandise from retailers that don’t have their own layaway program. Customers make periodic payments to the third-party layaway service provider. Once the item is fully paid for, the business then buys the item from the retailer and ships it to the customer. 

Nearly 400 consumers filed complaints with BBB in 2018 about layaway issues with retailers. 

When buying items on layaway, BBB recommends you 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? 

Can I get a refund or store credit if I no longer want the item after making a few payments? 

Is there a fee if I decide I no longer want the item? 

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?