Avoid the Pitfalls of Layaway by Understanding Policies up Front, advises BBB

December 10, 2012

Layaway has become increasingly popular with the challenging economic times. Many find it very helpful during the holidays to be able to spread payments over a period of time, but putting an item on layaway may result in a loss of money or the item itself if you don’t read the contract carefully, warns BBB
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 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. For instance, a lot of items might not be eligible for layaway on big sale days so call the store before you head down and stand in line on Black Friday, ,” said Kim States, BBB President. “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.”

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

How long can the item 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 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 that even after the last payment is made the product is not available, and sometimes is delayed for weeks or months. Consumers also report that after the last payment, delivery has been delayed due to other consumers having their delivery dates scheduled before layaway customers.

For more tips on how to avoid scams and make wise purchasing decisions this holiday season visit www.tucson.bbb.org/bbb-news.