Is Layaway a Good Idea for the Holidays?

Have you begun to think about holiday spending yet?  Whether you have or not, the retailers definitely are!  They are strategizing how to gain your money and as much of it as possible!  Their savvy luring techniques have already begun in an attempt to lengthen the holiday season this year.  Several stores roll out special Layaway Plans for the holidays, some start as early as September. 

Some offer plans with no upfront fees, while others will refund the upfront fee, but only in the form of a gift card after you pay in full.  Some are even advertising no cancellation fees.   

If your desire is to be smart about your holiday shopping and keep from increasing credit card debt, these credit interest saving deals may be a tempting idea.  There are several things to consider when deciding if this is a good way to purchase gifts:

• Read the fine print carefully.  There are often initial fees, cancellation fees, and restocking fees if you fail to pay or choose to cancel. 
• If you choose to cancel will you receive a refund in the form of a gift card or get your cashback? 
• Can the payments fit in your budget with a payoff in the time allowed?
• If the item goes on sale during the layaway period will you get the savings?
• Will you be tempted to buy more items every time you go to the store to pay?

Some Stores that Offer Great Layaway Plans

AAFES

The Military Exchange Stores offer layaway under the following circumstances:

30 days for all clothing, handbags and shoes

60 days for all other merchandise (except jewelry)

120 days for fine jewelry

They ask for:

A purchase of $25 or more

A 15% deposit on your total purchase

A non-refundable $3 service fee for processing

A $5 cancellation fee

Items that are excluded from layaway include:

Clearance merchandise

Computers, peripherals and major appliances

Furniture, mattresses, exercise equipment, seasonal and outdoor living

Electronics $299 and up.

Burlington Coat Factory

Burlington offers layaway under the following circumstances:

For In-store Purchases Only.

They ask for:

$5 service fee (plus tax where applicable)

$10 cancellation fee (plus tax where applicable) upon any change or if purchase item is returned to stock

Refunds of deposits and payments will receive a gift card.

Items excluded:

Food items

Take in-store layaway purchase to a Customer Service Desk to find out the full Layaway policy.  Sometimes Burlington offers a refund of the $5 service fee in the form of a bonus gift card.  Ask in your local store if this offer is active. 

Kmart and Sears

Kmart offers layaway under the following circumstances:

8 or 12-week plans. 

In-store (with a purchase of $300 or more for the 12-week option) or online.

They ask for:

A $10 down payment.

Payments every two weeks.

A $5 service fee for the 8-week plan and a $10 service fee for a 12-week plan.

A $10 cancellation fee for the 8-week plan and a $20 service fee for a 12-week plan.

Items excluded:

Only items marked “Layaway Eligible” can be placed on layaway. 

Walmart

Walmart offers layaway under the following circumstances:

Walmart Holiday Layaway is available in stores during the holiday season.

All supercenters offer layaway year-round for jewelry purchases only.

Individual items must be $10 or greater. Total purchases must be $50 or greater

Layaway begins on August 30, 2019. Final payment and pickup must be made on or before December 9, 2019, at the same store where layaway was initiated, if not the Layaway account will be canceled.

What they ask for:

There’s no opening fee.

The down payment is $20 or 20%, whichever is greater.

If the account is closed or canceled, items will be returned to inventory. Down payment and payments made will be refunded, less $20 or $20%, whichever is greater. The cancellation fee does not apply in Ohio, Maryland, Rhode Island, or Washington DC. The cancellation fee in AL will not exceed $25. Cancellation fee in NC will not exceed $50

Items excluded:

In stores only (not available for online purchases)

Available for Electronics, Auto Electronics, Large Furniture, Toys, Infant Toys and Furniture, Select Sporting Goods, Small Appliances and Jewelry

Excludes all wireless phones

Layaway not available on Thursday, November 28nd

You can set aside money yourself, in a similar way as layaway without the commitment and fees.  This may also help you save money by waiting to purchase during the pre-holiday sales. 

1  Start early and create a list of gifts you wish to buy, carefully considering what is an affordable holiday budget. 

2  Do price checks to add up what you may need to pay for each item. 

3  Count how many paychecks you will receive prior to the holidays. 

4  Divide your holiday budget by the number of paychecks. 

5  Set up an automatic transfer from your checking to savings for that amount. 

6  Keep your list handy and watch sale prices as your savings begin to build. 

7  When you have the money saved and see a good deal for an item on your list, purchase it. 

8  Be careful to remain true to your list; don’t be caught up in holiday deals for other items.  If you have any savings left after purchasing your gift list, leave it in a savings account or invest it. 

You can also read more information on Layaways from the Federal Trade Commission.

What have your experiences with layaway been?  Please share with us below. 

If you liked this post, you might also like:

Cutting Costs to have more to save for holidays.

Learning why a spending plan is better than a budget.

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