Layaway for the Holidays

December 16, 2011

Better Business Bureau is reminding consumers to be informed before utilizing layaway services, which have resurged at many major retail outlets due to the current economic climate.

Layaway programs allow customers to use payment plans to purchase items. Typically, buyers must make down payments to hold items and then make periodic payments for 30 to 90 days before they can take paid-off merchandise home.

Utilizing layaway services can be a great way for people to stay on track with their holiday budgets, and no interest is charged. Make sure you consider the following before signing a layaway agreement:

Plan: Establish a spending limit and ensure that layaway payments stay within the budget.

Pace: Know the payment schedule and how long it will last.

Pay: Some plans require upfront deposits based on flat fees or purchase price percentages. Ask if there are costs associated with missed payments, item storage or cancellations.

Protect: Keep record of each payment made and get all layaway details in writing, including: agreements, shipping details and cancellation policies. Many companies make all layaway details available online; print or save data for reference.

Pry: Research companies, especially lesser-known stores and online retailers. Before beginning layaway programs, visit

For more smart shopping and budgeting tips this holiday season, check out BBB's Consumer Tips and Managing Credit - Made Simpler.