Is Layaway Still a Thing and How Does It Work?

Layaway is a purchasing method where a consumer places a down payment on merchandise, which the retailer then holds while the customer pays the remaining balance in installments over a set period. This allows individuals to secure an item without needing to pay the full price upfront. Once all payments are complete, the customer takes possession of the product.

Where Layaway is Offered Today

Layaway, while less common than in past decades, remains an option at various retailers across the United States. Many department stores, jewelry stores, and electronics retailers offer this payment method. Specific chains like Kmart, Sears, Hallmark Gold Crown stores, and Burlington Stores provide layaway services.

Some retailers, such as Big Lots, may restrict layaway to specific categories like furniture, highlighting varied store policies. Availability can also be seasonal, with an increase in offerings during holiday shopping periods to help consumers manage gift purchases. While traditional in-store layaway persists, some retailers and third-party services now provide online layaway options, allowing for scheduled electronic payments.

The Layaway Process

Initiating a layaway agreement begins with selecting an eligible item and making an initial deposit. This deposit typically ranges from 10% to 25% of the item’s total price, though some stores may require a fixed minimum, such as $10 or $20. This initial payment reserves the merchandise.

After the deposit, a payment schedule is established with regular installments until the full purchase price is met. Common payment frequencies include weekly, bi-weekly, or monthly arrangements, with the total duration often spanning a few weeks to several months, such as 8 to 12 weeks or up to 90 days. Payments can often be made in-store, and online layaway allows for scheduled electronic payments.

Retailers frequently charge service fees for layaway plans, typically ranging from $5 to $10, which are often non-refundable. If a customer cancels the agreement before full payment, cancellation fees may apply, ranging from approximately $10 to $25 or a percentage of the item’s value. Some policies also include restocking fees for cancellations or missed payments.

In case of cancellation or failure to complete payments, store policies regarding refunds vary significantly. It is important to review these terms carefully. Some retailers may offer a refund of payments made, often minus any service or cancellation fees, while others might provide store credit or even forfeit all prior payments. Consumer protection laws generally require clear disclosure of all terms, including fees and cancellation policies, at the time of agreement. Once all scheduled payments are completed, the customer can pick up their merchandise.