Layaway plans could create a shopping headache this holiday season

November 05, 2012

BBB advises consumers to read the fine print on layaway contracts

GRAND RAPIDS, Michigan Many retailers rolled out their layaway plans for the holidays a month earlier than last year. Some are even offering additional incentives to use the layaway option, such as cutting fees and increasing the number of items eligible for layaway. But Better Business Bureau is warning that putting an item on layaway could result in some costly shopping blunders.


The layaway concept dates back to the Great Depression, when cash-strapped families found the idea of paying for items on a monthly or weekly basis attractive. The concept lost its luster in the days of easy credit, but it has been revived and proved popular in the last couple of years.

Additionally, third-party businesses have sprung up, offering online layaway plans between customers and retailers. Consumers can create and manage a payment schedule within their budget and make periodic payments to the third-party layaway service provider. Once the item is fully paid for, the business buys the item from the retailer and ships it to the customer.

For any consumer considering alayaway plan, BBB advises:

· Plan ahead. Before signing a layaway contract, make sure you can actually come up with the money to pay for the products. Unlike outstanding credit card debt, which will just accumulate interest, failure to pay your layaway means you lose don’t just lost the product, but also any fees you may have paid.

· Obtain a written contract. Ask the company for a written contract and read it carefully. Contracts should include when payments must be made and what happens if a payment is late. Keep in mind that each company may have a different layaway policy.

· Confirm how long the item can be kept on layaway. Some stores only hold items for a specific number of months, and then redistribute them for re-sale.

· Ask where item(s) will be stored. Be sure your items will be placed in a secure area until all payments are made, so they won’t be sold to other customers.

· Read the company's refund policy.What happens if you change your mind and decide not to purchase the item? Besure to check if refunds are available. 

About Better Business Bureau:
BBB's mission is to be theleader in advancing marketplace trust. BBB accomplishes this mission bycreating a community of trustworthy businesses, setting standards formarketplace trust, encouraging and supporting best practices, celebratingmarketplace role models and denouncing substandard marketplace behavior.


Businesses that earn BBB Accreditation contractually agree and adhere to the organization's highstandards of ethical business behavior. BBB is the preeminent resource to turnto for objective, unbiased information on businesses and charities.


Contact BBB Serving Western Michigan at (616) 774-8236.