Holiday Shoppers Warned of Layaway Pitfalls

November 09, 2012

Denver, CO – November 9, 2012 – Layaway has become increasingly popular in a slow economy but the Better Business Bureau (BBB) warns holiday shoppers to be wary of its potential downsides. Many find it helpful during the holidays to be able to space out payments. The BBB says putting an item on layaway may result in a loss of money or the item itself if consumers do not fully understand the agreement.

“Layaway problems reported to the BBB include disputes over policies, trouble making payments, and difficulty getting refunds,” said Hope Marie Sneed, vice president of development and PR for the BBB of Denver/Boulder. “Holiday shoppers should choose a reliable retailer and understand its layaway policy before paying a deposit.”

Items such as furniture, toys, electronics, and jewelry are commonly placed on layaway at a variety of stores, including national chains, local retailers, and pawn shops. BBBs around the country have received complaints in the last year from consumers whose layaway experiences were troubling.

One Denver resident filed a BBB complaint last December against F-rated EZ Pawn claiming that it sold his guitar while he was still making payments on it, and wouldn’t refund those payments. EZ Pawn said the guitar was sold because the consumer didn’t make his most recent payment in full per the agreement. They offered a store credit minus the layaway fee and a 10 percent restocking fee. The consumer disputed the restocking fee because he says the guitar wasn’t restocked, it was sold.

To avoid issues like this and other layaway letdowns this holiday season, the BBB recommends the following:

Ask the company to provide a written contract for the layaway and read it carefully. Know that retailers may have different layaway policies. In the agreement, look for answers to the following questions. If you can’t find the answer, ask the store and have them add the information to the written agreement.

  • How long can the item be on layaway?
  • Will the item be placed in a hold area until all payments are made?
  • If the item is not held for you, in what cases will it be sold to another customer?
  • When exactly is each payment due and what methods of payment are accepted? Is there a grace period?
  • What is the company's refund policy? Is there a restocking fee? Will only a store credit be issued?
  • Is there a fee to use the layaway program? If so, how much is the fee and is it refundable?
  • When putting a product on layaway that is not in stock, is the product ordered when the layaway is opened or when the last payment is made?

Consumers report to the BBB 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.

  • What is the delivery timeframe?

Consumers report to the BBB 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.

Visit to check out retailers before using layaway programs and for more holiday shopping tips.

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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, BBB Business Reviews , BBB Charity Reports 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, there are 114 local, independent BBBs across the U. S. and Canada. Please visit for more information.