All About Layaway: Pros, Cons And The Stores With Best Layaway Plans

All About Layaway: Pros, Cons And The Stores With Best Layaway Plans

Glance over a newspaper, or browse the online retailing sites, you will always find the layaway plans popping around from the major retailers - either for festivities or throughout the year, a layaway plan never gets a holiday.

The holiday shopping season is just here, and the retailers are all set to stocking up their inventory for layaway plans.

Today, nearly 41.6% of people are Layaway shoppers; if you are from the one, you might be familiar with the word. But if you are from the rest of 58.4% of the people, then you might be curious to know everything about Layaway.

Don’t worry! I am here for your service! I did enough research to compile this information for you so you can know everything about Layaway in a single article.

I will give you a piecemeal so you can digest the concept easily;

What is a Layaway Plan?

Layaway is the process, in which consumers reserve an item for later pick up by placing a small deposit of their total purchase. And when the customers pay the balance, they can grab the product they laid away. 

Layaway provides the customers the flexibility to pay the price bit by bit until they reach a zero balance of their purchase.

What Is Layaway?

How does a Layaway plan work?

Before hitting to the Layaway plan, read these guidelines to know how the layaway plan works;

  • Select your product and bring it to the Layaway department.
  • Give a down payment of around 10 to 20% of the purchase price (may vary with the retailers` layaway plan.)
  • Pay a minimal layaway fee.
  • Pick your layaway plan length- weekly, biweekly or monthly.
  • Complete your remaining balance by following the scheduled payments policy of the store.
  • Once you`ve reached a $0 balance, you can pick up your product from the store and take it home.

The basic terms and Conditions of the Layaway Plan

Every store has its own terms and conditions. Before you sign up for the Layaway plan, make sure you understand all the terms. These are the general terms;

  • Many stores charge a $5 to $10(non-refundable) service fee to sign up for an account.
  • All the stores have their minimum spending requirements. Like Walmart, has a minimum requirement of $50 or more.
  • The required down payment usually includes 10% to 20% of the total cost of your layaway items.
  • The due date of the payments varies according to the retailers. For example, Kmart requires a payment every two weeks.
  • The item can be on layaway till the deadline of your plan. Once that deadline hits and you haven`t paid it off, you will lose your merchandise.
  • If you change your mind with your purchase, some stores will charge you a “re-stocking” fee. It could be a percentage of original price or a flat fee.
  • Refund Policy- If you cancel your Layaway plan; you can get a refund by the store after deducting a restocking fee (depends on the retailer`s plan policy).

Tips For Layaway Plans

PROS of Layaway plans

PROS of Layaway plans

Why the holidays shopping worth it with layaway plans for some shoppers and why it is a viable option, here are some good reasons;

  • Promote Saving

You can`t give a new bicycle to your son with a layaway plan without paying off for; but, it isn`t bad. Somehow, it`s making you save money for it, which is a good thing. It doesn`t mean to put you tight on budget to put extra money each month. You`ve got to do that for yourself.

With Layaway plan you cannot delay the purchase of a new bicycle of your son by saying that we are tight on budget, layaway helps you fulfill the wish of your child with forced savings.

  • Break out holiday shopping Rush

Holiday shopping is always a hassle; you have to fight through the Black Friday crowd to make purchases.

But Layaway plans help you with it; you can get everything on your list in September or October and save you from abandoning your family on Thanksgiving weekend and Cyber Monday.

Just sit back and relax, because you have grabbed all the best gifts already.

  • Ward off interest costs

Unlike debit cards, layaway doesn`t accumulate interest or raise the interest amount on each purchase.

Layaway helps you to save the interest cost you pay with your debit cards and avoid any negative impacts on it.

  • No extra installment fees

The most significant benefit of Layaway plan is that you will have to pay only the amount of an item you want to purchase without getting stuck into the installment fees.

You can claim a favorite holiday item even if you can`t afford to pay for it upfront by laying it away on later payments.

  • Promote low credits shopping

If you want to buy your favorite item and you are low on credit, a layaway plan can grant your wish.

For people with bad credit or low income, a Layaway plan helps them to buy that little bundle of joys by paying for it little by little.

  • Cost is spread over multiple payments

If you want to do shopping for the special events like wedding, you don`t need to pay the funds all at once. Just reserve your items in the inventory for later pick-up and pay the cost in piecemeal.

Celebrate your big day without compromising on the things. A Layaway plan will be your best wedding planner.

CONS of Layaway Plans

With some benefits, Layaway programs have a few cons that you should consider before signing up. Everybody has its own perception, and the layaway program might not make sense for everyone, and that`s fine.

Here`s what to watch for.

  • Added  Costs

To avail the benefits of Layaway plan, you have to pay some subscription charges.

  • Sign-up cost

Some stores charge a little number of your bucks to layaway items. For example, Toys`R`Us and Marshalls, charge a $5 fee to sign up for the layaway program.

  • Restocking cost

Some stores require a $5 to $10 deposit, and if you fail to meet a 60- or 90-day payoff period, the store will charge you a restocking fee just to reshelve the items.

  • Down payment

You have to pay a down payment when you put something on layaway. Like Walmart requires a down payment of $ 10 or 10% of the original price.

A $5 or $10 fee may not be a big deal as compared to a high-interest rate attached to your credit card accounts.

  • Cancellation charges

If you change your mind and cancel the purchase, you have to pay cancellation charges. Most stores will charge a cancellation fee usually between $5 and $10 for layaway.

  • Limited time to complete the payment

Layaway plans have specific time limits to complete the amount. But, the time limit varies from stores to stores.

For example, Marshalls and T.J. Maxx have a time limit of 30 days for layaways.

Some stores also place limits to start the layaway contract around holidays. Like, Walmart shoppers can start their layaway plan only until December 12 this year.

Fair Advice: If you are not sure about the full payment of your purchase in the specific time limit, it might not be a good idea to start a layaway contract.

  • Chance of missing out on colossal deals

Another big disadvantage of Layaway plan is that you could miss out on hefty bargains while taking advantage of the limited-time sales prices.

When you pick an item on layaway, you`re stuck with its current price. When the same item goes on sale for Veterans Day, Cyber Monday or Black Friday, you will miss the grand discounts unless you cancel your purchase.

If you`re anxious about missing a deal or also want to get the best bang for your buck, a layaway program might not be a good idea.

  • Wait! Wait! And wait!

One of the biggest disadvantages of having a layaway program is that you have to wait for the item until it`s fully paid off.

  • Keep you tied to your purchase

With layaway, you are stuck with the item you have placed on hold.

But what if you find that same gold ring for half price elsewhere? Or what if the kitchen mixer you have picked gets terrible reviews?

If you cancel the purchase, you have to pay cancellation charges. So either pay it up or live with it. No other option!

  • Disturb your holiday budget

Retailers use the smart strategy by putting high-dollar items on layaway so that people buy it by paying the price in bite-size chunks. It makes it easy for them to sell their items by setting it on weekly payments.

Before purchasing something; ask yourself:

Can I truly afford it?

Does it fit into my budget?

Can I wait for too long to get the item?

The choice is yours!

  • A limited selection of items

Some stores put a limited number of items on layaway. Chances are you will not always get the item you want to buy on Layaway plan.

Probably you can`t buy computers, food, and liquids through layaway. It depends on the retailers` layaway programs.

  • Makes you an impulsive buyer

When you are shopping with Layaway plans, chances are, it may lead you in an impulsive state of buying the things without even looking at your budget. It might be dangerous for you.

For example, when you see staggering jewelry that is worth $5,000, you will add it to your shopping cart even if you can`t afford it, because you have the advantage of paying it off later.

Stores with the best Layaway programs

Stores with the best Layaway programs

As the holiday shopping season is around the corner, the giant retailers such as Amazon and Walmart are retooling their layaway programs. But there are other smaller merchants on the list who are considering adding a layaway option.

Following stores are offering the best layaway Plans. Watch out for the best deals and spend your bucks wisely.

Sign up cost: $5

Down Payment: 10% of purchase price.

Payments date: May vary by agreement. But make sure you pay all purchases in full by a predetermined period in December.

Cancellation Fee: $10

Minimum purchase of each item must be $5 and total purchases must equal at least $50.

Kmart offers in-store land online layaway plans.

Sign up cost: $5 for online layaway; $10 for in-store layaway.

Down Payment: 10% of purchase price.

Payments duration: Biweekly payments, which you can make online over an eight-week period or in-store over 12 weeks.

Cancellation Fee: $10

Sign-up cost:  $5

Down payment: 10% of the purchase price

Payment duration: 90 days payment option

The easy lease plan is also called “price Hold” and is mostly used for furniture purchase.

Sign up cost: free of cost.

Deposit: Depends on the cost of your purchase.

Payment schedule: Two to 12 payments; all payments must be made within 12 months.

Cancellation terms: 25% of the price restocking fee.

Sign up cost: $5

Down Payment: 10% of the total purchase

Payments duration: Biweekly payments, an eight-week plan or 12-week Layaway in-store Plan.

Cancellation Fee: $15 for eight-week layaways and $ 25 for 12-week Layaways.

Sign up cost: $5

Down Payment: 20% of the total purchase

Payments duration: Final payment due by December 24, 2018.

Cancellation Fee: $10(plus tax where applicable)

*The retailer offers layaway plans for all year long not only for holidays

Sign up cost: $5

Down Payment: 10% of the total purchase

Payments duration: Items can be held up to 30 days

Cancellation Fee: $5

*Not all Marshall`s stores can provide layaway plans.

Sign-up cost:  minimum $25 starting cost

Payment duration: Offers weekly or bi-weekly deposit options. Final payment due date is by December 19, 2018.

Sign-up cost:  $5

Down payment: 10% of the total purchase

Payment schedule: Payment must be cleared within 30 days

Cancellation fee: $5 fee

Sign-up cost: no cost.

Down payment: Depends on the cost of your purchase.

Payment duration: Payments of at least $10 must be made every two weeks, and the final payment due is within 24 months.

Cancellation fee: No cancellation charges.

Down payment: 20% of the total payment.

Payment schedule: Payment must be cleared within 60 days.

No sign-up or cancellation fee required.

Sign up cost: no cost.

Down payment: depends on the price of your purchase.

Payment schedule: Payment must be cleared within 90 days.

Cancellation fees: $25 restocking fee.

No sign-up cost.

Deposit: Depends on the cost of your purchase.

Payment schedule: two to twelve payments; Lay-A-Way period cannot be extended beyond 3 months.

Cancellation terms: 25% of the full value of the product.

Currently available for in-store only.

No signup cost.

Deposit: 10% of the purchase price.

Payment schedule: monthly payments, the full payment must complete within 10 months.

Cancellation terms: Full refund without any cancellation charges.

eLayaway Plan

The e-Layaway plan works a bit differently than traditional layaway programs. E-Layaway allows you to open a layaway plan through your choice of multiple retailers. The retailer ships your purchase when you pay off though eLayaway.

  • The Service fee of the eLayaway plan varies by type of investment. For instance, for retail purchases, the service fee costs from 1.9% to 3.9% of your total purchase, while for health-related purchases, it costs up to 7.9% of your entire purchase.
  • The e-layaway plan has no down payment and no sign-up costs.
  • You can make monthly payments using ACH debit from your checking account.
  • The cancellation charges are 10% of the total purchase, or $25, whichever is less.

Wrap up

If you are tight on budget and also want to make larger purchases for the festivities, a Layaway plan can help you avoid the costs of expensive acquisitions.

Forget those depressive installment plans, when you can get the same benefit with small, manageable payments without the element of borrowing. It is better to save up than putting an entire Christmas or Halloween on credit.

Make your shopping list bigger this year and have fantastic holidays.

Happy Shopping!

Happy Shopping