Do Any Stores Still Offer Layaway Plans?

Layaway is a payment method allowing consumers to secure an item by making a series of payments over time. Historically, layaway offered a way to acquire goods without immediate full payment or the use of credit.

Stores That Offer Layaway

While less common than in previous decades, layaway programs are still offered by certain retailers, particularly during peak shopping seasons like the holidays. Larger department stores may reintroduce layaway for specific periods or product categories, often for items such as jewelry or electronics. Specialty stores, including some independent shops, might maintain year-round layaway programs for higher-priced goods. General merchandise retailers may also limit layaway to certain departments or require a minimum purchase amount, typically around $30 to $50, to initiate a plan. Consumers should inquire directly with a specific retailer about their current layaway policy. Some well-known names that have historically offered or continue to offer layaway include Burlington, Kmart, and Sears.

How Layaway Works

A typical layaway agreement begins with an initial down payment, which commonly ranges from 10% to 25% of the item’s total purchase price. This initial deposit secures the item, removing it from immediate sale inventory. Following this, the consumer makes regular installment payments over a set period, which can be scheduled weekly, bi-weekly, or monthly, as agreed upon at the time of setup. The duration of a layaway contract typically spans from 30 to 90 days, though some retailers may offer plans extending up to 8 or 12 weeks.

Should a consumer miss a payment, retailers may cancel the agreement, and specific fees may apply. Cancellation fees, often ranging from $5 to $25, are common, though some can be higher or calculated as a percentage of the purchase price. A small service fee, usually between $3 and $10, might be charged at the outset.

Refund policies for canceled layaways vary; some retailers return remaining payments as cash, while others issue store credit. Once all scheduled payments are completed and the full balance is satisfied, the customer can then take possession of the item. Layaway plans typically do not charge interest, making them distinct from credit-based financing options. Certain items, such as perishable goods, clearance items, or gift cards, are generally not eligible for layaway programs.

Alternatives to Layaway

For consumers seeking flexible payment options beyond traditional layaway, several modern alternatives have become widely available. “Buy Now, Pay Later” (BNPL) services are a popular choice, allowing immediate possession of goods while dividing the purchase price into several installments. These payments are often interest-free if settled on time, typically over a period of a few weeks or months. However, BNPL providers may perform soft or hard credit checks, and late payment fees can apply, potentially impacting a credit score.

Store credit cards and financing programs offer another avenue for purchasing items over time, granting immediate ownership upon approval. These options usually require a credit application and approval, and interest rates can vary significantly based on the consumer’s creditworthiness. While they can help build a credit history, high interest rates can lead to increased costs if balances are not paid in full each month.

A more straightforward approach involves simply saving money for a desired purchase. This method avoids any debt, interest charges, or fees associated with payment plans. Saving allows consumers to pay the full price upfront, providing complete ownership without future financial obligations. Each of these alternatives presents different financial implications and should be considered based on individual circumstances and budgetary needs.