Use Layaway, Don't Let It Use You

December 01, 2011

Denver, CO – December 1, 2011 – Layaway has become increasingly popular with the challenging economic times. Many find it very helpful during the holidays to be able to space out payments. However, putting an item on layaway may result in a loss of money or the item itself if you do not read the contract carefully.

BBBs around the country have received complaints in the last year from consumers whose layaway purchase did not turn out the way they anticipated.

Consumers mainly place furniture, toys, electronics, and jewelry on layaway and do so at a variety of stores, including national chains, local retailers, and pawn shops.

“It’s important to know the policies up front. Problems can be avoided if customers get the agreement in writing, understand it and ask questions if anything is unclear or missing,” said Dale Mingilton, president and CEO of the BBB Serving Denver/Boulder. “Also, the worst thing that can happen with layaway is the company going out of business. So be sure to only sign up with a reliable retailer.”

The BBB suggests that consumers consider the following when using layaway this holiday season:

Ask the company for a written contract for the layaway and read it carefully. Keep in mind that each company may have a different layaway policy. Check for:

  • How long the item can be on layaway?

It’s important to know that some items have a time limit and once that time is up, the item is returned back to the store for someone else to purchase.

  • Will the item be placed in a hold area until all payments are made?

If the item is not held for you, it may be inadvertently sold to another customer.

  • Is there a specific date when each payment must be made?

The contract may specify when payments must be made and that, if a payment is not made by that date, the layaway item can be sold to another consumer.

  • What is the company's refund policy? Is there a restocking fee? Will only a store credit be issued? Are no refunds available?

Consumers report not being able to obtain a refund or a store credit if they change their mind about buying the item put on layaway. In addition, complaints state that restocking fees of 10% or more are often charged.

  • When putting on layaway a product that is not in stock, is the product ordered when the layaway is opened or when the last payment is made?

Consumers report that even after the last payment is made the product is not available, as it is then ordered and sometimes is delayed for weeks or months.

· Delivery timeframe should be determined up front.

Consumers report that after the last payment, delivery has been delayed due to the product not being available or other consumers having their delivery dates scheduled before layaway customers.

  • Is there a fee to use the layaway program? If so, how much is the fee and is it refundable?

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About the BBB
The BBB is an unbiased nonprofit organization that sets and upholds high standards for fair and honest business behavior. Businesses that earn BBB Accreditation contractually agree and adhere to the organization’s high standards of ethical business behavior. The BBB provides objective advice, free BBB Business Reviews and BBB Wise Giving ReportsTM on charities and educational information on topics affecting marketplace trust. To further promote trust, your BBB also offers dispute resolution services for consumers and businesses. The first BBB was founded in 1912. Today, 125 BBBs serve communities across the U.S. and Canada. Please visit for more information.