BBB Advises Layaway May Be Your Answer For Christmas Shopping

Layaway plans are a good idea, especially for customers who want to buy products without paying the full amount upfront and do not want to use a credit card. Many retail companies are now advertising layaway opportunities for their customers to help them plan for their holiday shopping.

Layaway services are back in a big way, with many businesses now shaking the dust off their layaway programs for today’s beleaguered consumers.

When purchasing items on layaway, the buyer must typically make a down payment of 10 to 20 percent and pay any service or plan fees for the store to hold the item for them. The customer then has typically 30 to 90 days to make periodic payments to pay off the balance. Once it is paid off, the customer can take the items home.

Layaway services can be a great alternative to using a credit card. However, it’s extremely important that customers take note of the fine print and know what to expect.

Online Layaway:

Layaway purchase plans are not limited to brick-and-mortar retail outlets; some online merchants use them, as well. Some layaway sites operate like a combination shopping search engine and online shopping mart: The companies have hundreds of merchants and online retailers selling name brand items.

First, you select a product. Then, you pay: some sites require electronic debiting from your checking account; others require that you pay by check or money order through postal mail. Still others allow you to pay with credit or debit cards, or use online payment services. Once you’ve paid the balance, the online layaway service pays the merchant, and the merchant sends you the product.

When buying items on layaway, BBB advises consumers to get everything in writing and offers the following tips:

• Read the fine print. Ask the company for a written contract for the layaway and read it carefully. Keep in mind that layaway policies may differ from one company to another.
• Layaway period. Ask how long the item can be on layaway? The length of time that items can be placed on hold varies from store to store.
• Merchandise holds. Find out if the item being placed on layaway is put on hold immediately or when it is paid for. Some consumers were informed that the product they were paying on had been sold to another consumer.
• Payment dates. Make sure you know the specific date when each payment must be made by. If a payment is not made by that date, the layaway item can be sold to another consumer or returned to stock, and you may lose the money you have paid down on it.
• Refund policy. Read the company’s refund policy carefully. Retailers’ policies may differ: some give all the money back; others may charge a non-refundable service or restocking fee; still others may offer a merchant credit for the amount you paid.
• Order date. If the product is not in stock, be sure to find out when it will be ordered. Will it be ordered when the layaway is opened or when the last payment is made? Consumers report that some items are not ordered until after the last payment is made and then the product is not available
• Delivery dates. If the product you have on layaway has to be delivered to you, make sure that the delivery date is listed in the contract. Consumers report delivery delays due to the product not being available or other consumers having their delivery dates scheduled before layaway customers.
• Layaway fees. Make sure you find out if there are any additional fees to layaway merchandise. You should also find out if the additional fees will be refunded if you cancel the layaway.
• Check with BBB. Search the company on bbb.org to see if it’s a company you can trust.

Most stores will offer a refund or store credit equal to the amount of money that you have paid so far (minus a reasonable service fee or re-stocking charge). That being said, there is no federal or Georgia law that guarantees you the right to receive a refund under a standard layaway policy. Therefore, what you actually get back will mainly depend upon the company’s layaway policies. However, those policies should have been clearly disclosed at the time of purchase (for example, on the sales receipt or on signs prominently displayed in the store).

One Last Thing: Let’s remember to support our Small Businesses. Besides national chains don’t overlook your local retailers that might offer layaway plans too. If you decide to shop locally, it doesn’t hurt to ask if they, too, have layaway plans. Some stores will even work with you on establishing payment plans if they don’t already have a layaway plan in effect.

For companies you can trust please visit bbb.org/atlanta.