Layaway — a popular graduated payment option just a couple decades ago — is making a comeback as retailers attempt to lure shoppers back into their stores for the upcoming holiday season.
Kmart's layaway program saw double-digit increases in customers and sales in 2008 and, according to the company, the word “layaway” had more than double the interest among U.S. Web searchers in August 2009 than in August 2008.
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. The customer typically has 30 to 90 days to make periodic payments to pay off the balance. Once it’s paid off, the customer can take the items home.
Some stores provide online layaway services for items purchased via the retailer’s Web site. And third-party businesses have sprung up to set up layaway plans online between customers and retailers who don’t already have a layaway program. Customers make periodic payments to the third-party layaway service provider. Once the item is fully paid for, the business buys the item from the retailer and ships it to the customer.
When buying items on layaway, your BBB offers the following checklist of questions to ask:
• How much time do I have to pay off the item?
• When are payments due?
• How much do I have to put down?
• Are there 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?
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About the BBB
The Better Business Bureau, founded in 1912, is a champion for ethics and trust in the marketplace. Only businesses that meet the high BBB standards are invited to become BBB Accredited Businesses. Today, 128 BBBs across the United States and Canada rate more than 3 million local and national businesses and charities with scores ranging from A to F. Only a BBB Accredited Business may elect to participate in BBBOnLine, one of the most trusted and recognized Internet seal programs in the world.
The BBB serving northern Colorado and Wyoming is trending toward 1 million instances of service to consumers and businesses in 2009. These services include reliability reports on local companies and charities, access to companies that can be trusted by industry, help with dispute resolution, and trustworthy information on consumer and business topics.
Barbara Read, VP Communications Director, 970-488-2035, bread@wynco.bbb.org