Who Has Layaway and How Do These Plans Work?

Layaway provides a structured payment method allowing consumers to secure merchandise by making incremental payments over a defined period. This financial arrangement enables individuals to reserve an item without needing to pay the full price immediately. The retailer holds the item until the entire balance, including any associated fees, is paid in full. This approach differs from credit purchases, as it involves no interest charges and does not require a credit check, making it accessible to a broader range of shoppers.

Retailers Offering Layaway

While less common than in previous decades, layaway remains available at various retailers, especially for higher-priced items. Burlington and select Hallmark Gold Crown Stores offer 30-day layaway programs, typically requiring a 20% down payment and a $5 service fee.

Other stores like Kmart and Sears continue to offer layaway, often with 8-week or 12-week plans. Kmart’s plans may involve a $5 service fee for an 8-week term or $10 for a 12-week term, alongside a required deposit. Big Lots offers layaway primarily for furniture at select locations, usually requiring a 10% deposit. Smaller, specialized retailers, such as jewelry stores and pawn shops, also offer layaway. Major retailers like Walmart and Target have largely transitioned away from traditional layaway, instead partnering with “Buy Now, Pay Later” (BNPL) services. These services allow immediate possession of goods but involve credit checks and potential interest.

Understanding Layaway Terms

Layaway plans come with specific terms that consumers should review before committing to a purchase. A down payment is typically required to initiate a plan, commonly ranging from 10% to 25% of the item’s total price, or a set minimum amount like $10 or $20, whichever is greater. This initial payment secures the item and demonstrates the buyer’s commitment.

Payments are structured weekly, bi-weekly, or monthly, with plan durations often spanning 30 days to 12 weeks, or up to 90 days. Most plans include a non-refundable service fee, usually between $5 and $15, covering administrative and storage costs.

If a customer cancels or fails to make payments, cancellation fees (typically $5-$25) may apply. The service fee is generally forfeited, and payments made may be refunded as store credit or a partial refund, often minus the cancellation fee. Eligible items are typically higher-value goods like electronics, jewelry, appliances, and furniture. Perishable items, clearance, or marked-down goods are frequently excluded. The item remains with the retailer until all payments are completed, after which it can be picked up or shipped.

Initiating a Layaway Plan

Starting a layaway plan involves a series of straightforward steps, beginning with selecting the desired merchandise. Consumers should confirm that the item is eligible for layaway under the store’s specific terms, as not all products may qualify. Once an eligible item is chosen, the customer proceeds to the customer service desk or a dedicated layaway counter to formalize the agreement.

An initial down payment, typically a percentage of the total purchase price, is made along with any applicable non-refundable service fees. A layaway contract, outlining the payment schedule, total cost, cancellation policy, and final payment due date, will then be provided. Reviewing and signing this agreement confirms understanding of the terms. Customers are often given a receipt or a layaway card to track payments and the remaining balance.

Subsequent payments can usually be made in-store at any register, and some retailers offer options for online or phone payments. Upon making the final payment, the item is released to the customer for pickup from the store or, for online layaway, arranged for shipping.