A layaway plan is defined as
a system of paying a deposit to secure an item for later purchase.
Layaway plans were super popular back in the 70’s and early 80’s and have recently been popping back up during holiday season. Once having the stigma of being used by people with financial hardship, it has now become more of a money management strategy, and no better time to be introduced than around the holidays!
Are Layaway Plans Worth It?
Is it worth it to put your holiday shopping items on a layaway plan? Check out my latest segment on WPBF and my pros and cons list below!
PROS
Layaway plans allow for you to get a head start on holiday shopping.
You won’t have to worry about the item you’re looking to gift to someone as being out of stock since you are planning ahead by shopping early and putting it on layaway.
The cost of your holiday shopping can now be spread out over the number of weeks designated in your layaway plan.
If you have sneaky little ones (or big ones) in the house, you won’t have to worry about them finding their gifts because they won’t be hidden at home!
Layaway plans are better than using your credit card because you don’t incur the costs associated with interest rates which can be as high as 30%.
If you are an impulsive shopper, you have the opportunity to change your mind and not purchase the item(s) on layaway (although you may incur a cancellation fee and lose any fees you’ve previously paid).
If you miss a payment or cancel, you have to pay the fee associated but there’s no bearing on your credit.
CONS
Depending on the retailer, there may be a minimum amount that you need to place on layaway, which can lead to purchasing unnecessary items to reach that set dollar amount.
Also depending on the retailer, there may be some exclusions – items that are not able to be placed on layaway.
If the dollar amount of the item is low, you may be incurring a higher “interest rate” once you add up the deposit and any fees that are required.
If the item goes on sale for lower than the price it was when you put it on layaway, you may lose out on savings. Some stores may allow for price adjustments, but set a limit to them.
If you cannot afford to purchase the item now, is it really important that you buy it? These are the times when your “wants” and “needs” may get a bit confused.
STORES OFFERING LAYAWAY
I did a bit of research as to what stores are offering layaway plans as well. Please be sure to double check the stores’ layaway policies as items may have changed since this post was published.
WALMART:
- Layaway plans started September 2nd and you have until December 12th to pay it off
- As of the date of this post there is no opening fee
- Put down 10% or $10, whichever is greater
- You can place items as low as $10 on a layaway plan with a $50 minimum basket
BABIES R US & TOYS R US:
- Layaway started August 28th and goes through through December 14th
- They are offering a special now where if you deposit 10% of the cost and the $5 service fee is waived
- The cancellation fee is $10
KMART:
- Their layaway special runs through September 14th, which offers only $10 down.
- There are 2 layaway options:
- Online & In-Store: You have 8 weeks to pay off the layaway, with payments needed every 2 weeks. There is a $5 service fee and $10 cancellation fee.
- In-Store Only (total purchase has to be $300 or more): You have 12 weeks to pay off the layaway, with payments needed every 2 weeks. There is a $10 service fee and $20 cancellation fee.
SEARS:
- Sears’ layaway special as of this post is one penny down online, no money down in stores!
- You can also add an in-store layaway contracts to your online contract so you can make those payments online too!
- Sears also offers 2 layaway options:
- Online & In-Store: You have 8 weeks to pay it off with payments every 2 weeks. $0 down payment, $5 service fee, and $15 cancellation fee.
- In-Store Only (total purchase has to be $400 or more): You have 12 weeks to pay it off with payments every 2 weeks. $0 down payment, $10 service fee, and $25 cancellation fee.
I see them becoming more and more popular as the holidays sneak up on us – especially the online layaways! Have you ever taken advantage of a retailer’s layaway plan?
Rachel G says
I’ve never put anything on layaway–I guess when I buy something, even as a gift, I want the satisfaction of being able to actually bring it home then! But I know lots of people do use this system.
Dana says
Rachel, I am a lot like you at times. That’s instant gratification – I crave it!
Tara L says
I personally never really use Layaway I think it’s just a waste of time and money in a way or I really just don’t understand the concept of a layaway.
Dana says
Layaway can, depending on the dollar amount of what you are putting “away”, save you money as opposed to credit card interest rates. It’s a way to shop, and pay off the items in set installments.
HOLLY says
I noticed in the past two years more and more stores offering layaway once again. This is a great way for moms and dads to get ahead on Christmas shopping and gentle on the wallet.
Dana says
I completely agree with you Holly! The payment plan without the stress of interest rates is great!
Jennifer L says
Great pros and cons! I’ve never tried layaway because I like to make sure I’m buying what I can afford. but I can definitely see the convenience.
donna says
I never really use layaway because I dont even go in to stores anymore. I do all of my shopping online
Dana says
Donna, there is online layaway now too 😉
blair villanueva says
The only time I’ve use the layaway plan is when I was working in a Pawnshop, and my company offers that service. Actually it is just a second option (but customers will always decide which best for them) coz most of them prefers the credit card.
Nowadays I prefer to purchase with my credit card coz my card company gives awesomely low rates during holidays.
Dana says
Blair, that is great that your credit card gives low rates during the holidays! Some people also like to purchase with their credit cards if the cards offer points or cash back!
gracie says
Wow! So interesting, love this! xx, gracie
snappedbygracie.com
Amber says
I personally have never done layaway. I prefer to pay for everything up front so I know I have enough.
Dana says
Amber, that is a great way to purchase too – as long as it is paid with cash and not on a credit card, right?
Nellwyn says
I’ve never bought anything on layaway before but you’ve definitely given me a lot to think about!
Dana says
Glad you enjoyed the info Nellwyn!
Tina C. says
I have never used a layaway plan. We have a savings fund for Holiday gifts. This is very in depth. And I can see where a plan like this could benefit moms and dads, especially with the items that kids and teens want being more expensive these days. Thank you for spelling this out for those of us not on the level.
Dana says
Tina, I like your idea of the holiday savings fund. Layaway plans allow for that scheduled payment without the high interest rates 🙂
Beryl says
I’ve never considered lay-away as an option, maybe because student loan payments are daunting enough without some other monthly payment to consider. I’m also, like another commenter mentioned, into the whole “instant gratification thing”. Even Amazon Prime is too long for me hahaha.
Dana says
Beryl, LOLOLOL I am the same way about instant gratification! (I too think Amazon Prime should be overnight shipping ;))
Ana says
I’ve never heard about Layaway system but I need to study more about it! Thanks for introducing this system through your post!
Dana says
My pleasure Ana!
Nicole says
I haven’t considered layaway is so long. They seem to have gotten away from it but are bringing it back now. I’m glad you’ve mentioned it as I may try it out a few places this year for the holidays. Great take on the pros and cons of layaways.
Laura says
I really enjoyed your segment! You handle being on camera really well.
Your final “con” about layaway is the one that I would watch out for. If you can’t afford it do you really need to buy it. That said, layaway (or payment plans) are great for things like engagement rings or new laptops. Things that are expensive but that you CAN afford, you’re just spreading out the payment.
I paid for my vitamix over the course of 6 months, it was nice not to have to take a HUGE hit to my credit card in one go.
Great post!
Dana says
Thank you Laura! I’m getting more and more comfortable on the camera – it’s a lot of fun too!
I agree with you 100% that layaway plans are perfect for those high price items that, although you could bring them home today, it is better that you spread the cost over a set period of time. Your vitamix is a perfect example – it is a high-priced item that you know you want, and by just purchasing it and taking it home today wouldn’t fit into your monthly budget, but small monthly payments would! Thank you for stopping by!!!
Jemma says
I don’t think we have this service in the UK. I think I would prefer to take it away with me on the day, but can see the benefits.
Dana says
I like the instant gratification factor too Jemma 🙂
Dannii @ Hungry Healthy Happy says
I haven’t done this before, as I only buy what I can afford. But there are lots of pros and cons.
Dana says
Completely agree with you Dannii! It’s not for everyone 🙂
Valerie says
I’ve never done layaway but thought about it. If they didn’t charge fees it might be worth it to get a head start and make sure you get the item. The down side would be if the item goes on sale.
Dana says
Yes, I love to get a head start on shopping. There are some places that run promotions where there are no fees for a short period of time; but as you said if the item goes on sale and the store doesn’t price match it’s a bummer.
Roxy says
I love layaways….especially the ones that are interest free/no strings attached. I typically avoid ones that have stipulations that may burn me in some way.
Alexis says
I’ve never used layaway before…does Luis Vuitton have it? LOL! Great job on the news!
Dana says
LMAO Alexis!!! I wish! (Or do I….)
Steve Zuckerman says
So awesome input! I didn’t try the Layaway system yet. You did a great job to introduce this to me (lazy people). Thanks for your effort.
jojo vito says
I guess there are pros and cons. But if you really like the item and the price is really that high, then maybe It can serve its purpose.