Layaway plans could create a shopping headache; read all the fine print

By Robb Hicken/BBB’s chief storyteller

Watched my first Christmas ad of the season with disbelief. Not so much that the ad appeared the day after Halloween, but that the topic was on shopping and using layaway planning instead of credit cards.

It’s a wise option, and can save money in the long run, if you pay attention to the details.

Many retailers rolled out their layaway plans for the holidays a month earlier than last year, with some stores even offering more incentives to use the layaway option.  In addition, BBB advises:

  • 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 payment means you could lose the product and any payments already paid.
  • Obtain a written contract. Ask the company for a written contract 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 different layaway policies.
  • Confirm how long the item can be kept on layaway. Some stores only hold items for a specific time period, and then redistribute them for re-sale — If not paid in full.
  • Ask where item(s) will be stored. Be sure your items will be placed in a secure area until all payments are made, so they won’t be sold to other customers.
  • Read the company’s refund policy. What happens if you change your mind and decide not to buy the item? Be sure to check if refunds are available.

1 Comment

Filed under Code of Advertising

One response to “Layaway plans could create a shopping headache; read all the fine print

  1. Mark Burrows

    I have to back this up. The layaway plan is an old an honorable business practice that retailers used long before credit cards. It was a way to build a solid customer clientele and insure repeat business. Yes, we signed contracts, and knew that if we defaulted we would lose our claim to the layaway. Refunds were given with a percentage taken out for storage and possible loss of profit, but it was made clear when placing the item on layaway. Back then, if you made payments on time, retailers never charged any fees. There was always smiles and handshakes when you finally made the final payment and collected your purchase. Yet during the time, you found yourself at that store that held your item buying less expensive items because you had a bond with that establishment. Credit cards took all of that away.
    Sure, chain stores created their own credit cards and we all went crazy and then overspent and then collection agencies were chasing us down and we were too embarrassed to enter those stores again. Then the major credit cards from banking establishments gave us a new freedom and we learned to abuse those as well but for some reason we didn’t care.
    By all means it is important to read and understand the small print. It is important to ask questions. There is no such thing as a stupid question, only stupid people who think they know everything and don’t need to ask questions. Statistically and psychologically men fall in the the largest part of this category. I don’t care for statistics but I do have a background in psychology and being a man, it’s a sore point.
    Yet, the layaway plan it a good thing as long as you respect the rules and you respect the merchant.

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