Pay it Forward: Holiday Layaway Makes A Comeback
Considering that 60% of Americans admit they do not have a holiday budget and people spend up to 30% more when paying with plastic instead of cash, it’s easy to understand why the American Bankers Association estimates it takes the average consumer six months to pay off seasonal debt.
Tough economic times have brought back an old-fashioned remedy to make holiday spending plans a little easier this year: layaway. In the days before widespread credit card use, someone who lacked the money to make a purchase would arrange for the store to lay the item away from the sales floor giving them time to make smaller payments over several weeks or months until they had paid in full and could take their purchase home.
Today, large chains and shopping sites such as Sears, Kmart and the Home Shopping Network offer a wide selection of what’s on their shelves through layaway plans. Online layaway sites give holiday shoppers the opportunity fill their carts at many different kinds of stores and have the total cost of their purchases divided into smaller payments over time. The purchases are shipped as soon as the final payment is made.
With layaway, the early bird can still get the bargains. The best selection is on store shelves early in the holiday season when you may not yet have enough money saved to buy gifts. With layaway, you can have your choice and pay on your timetable.
Layaway also reduces impulse buying by giving you the time to be sure you are buying the right gift at the right price. Shoppers using layaway give themselves the gift of peace of mind knowing that all the holiday presents have been paid for before they are opened.
While there is no federal act that specifically regulates layaway, there are laws that pertain to unfair practices and truth in lending. The Federal Trade Commission suggests that consumers and retailers use the following checklist when entering into a layaway agreement:
- Do you have a complete description of the merchandise to be purchased in case memories fade over time?
- What is the total price of the purchase, including any service, layaway, or other charges?
- What is the minimum amount of each payment?
- What are the dates when payments are due?
- What is the date when the final payment must be made?
- Is there a cancellation and refund policy that offers full or partial refunds or store credit toward future purchases?
- How are refund or credit amounts determined?
- Will the item you are purchasing be separated from other merchandise so it cannot be sold to someone else?
- If the item is taken out of general stock, or not in stock, when will it be ordered for you so that you will have it when you make your final payment?
