Layaway Programs: How Do They Work?

Layaway Programs - Quicken Loans Zing Blog Even though we’re still over a week away from Halloween, it feels like the holiday season has already started. The other morning on Fox 2 News here in Detroit, they noted that nearly one quarter of Americans have already started holiday shopping. With constant daily reports of increased spending this holiday shopping season, stores are thinking of ways to grab shoppers. One way many department stores are doing this is through the resurgence of layaway programs.

Not sure which layaway program is right for you? Don’t worry! We’ve got you covered. Below are a few popular stores and an overview of their layaway programs.

Wal-Mart
Wal-Mart offers one of the most inexpensive layaway programs out there. The items you want to put in layaway must be priced over $15 dollars, and the total amount you spend must reach a minimum of $50. When you open a layaway account, you’ll have to put down a $5 deposit, which is refunded via a Wal-Mart gift card once you pay the bill in full. You also have to put a $10 down payment or 10% of the total, whichever amount is greater.

If for some reason you decide to scrap your layaway order, you get all of your payments and down payment returned; however, you lose the $5 deposit.

Overall, Wal-Mart offers a decent layaway program that doesn’t have a bunch of additional charges tacked on top. Plus they have one of the lowest minimum order amounts.

Toys“R”Us and Babies“R”Us
Babies“R”Us and Toys“R”Us currently offer free layaway with no upfront fees. However, in their terms and conditions, a deposit of 20% of the total amount with taxes must be paid when your items go into layaway. Within 45 days, you must have half of your order paid. After three months, you must have your layaway order paid off completely.

If you cancel your order, whether you have less or more than 50% of it paid off, the store will give you a full refund after they take out a portion for a cancellation fee. Make sure you ask what the cancellation fee will be at your specific store, as it varies from state to state.

Pretty much every Toys“R”Us location offers their layaway program on all toys; however, some stores don’t offer a program for larger toys or baby items. You can check their list to see which store offers what near you.

Although they promote free layaway on their website and in stores, the terms and conditions beg to differ.

Best Buy
Best Buy’s layaway program has some steep requirements. First, your layaway order has to total at least $250. Then, you must put 25% down on your order plus an additional 5% layaway fee. For a $250 order, you’re putting down a third of the money upfront (which is $75). That’s a lot compared to other layaway offers.

Once your items are in layaway, you must make biweekly payments and have it paid off within 12 weeks – though the amount of time may be less for certain products. Computers, for example, have a maximum of 8 weeks in layaway.

One troubling feature about Best Buy’s layaway program is that I couldn’t find any information about their cancellation policy.

Kmart and Sears
Kmart and Sears recently revised their layaway program, advertising free layaway with no service fee. Much like Toys“R”Us, their terms and conditions tell a very different story.

The layaway program at Kmart and Sears is very similar to Best Buy. These two retailers require a $20 or 20% (whichever is greater) down payment on your order. Then, they require you to commit to either an eight- or 12-week biweekly payment plan. Plus, they have a seven-day grace period for you to make up late payments before your order gets canceled.

If you decide to cancel your layaway purchases, you’ll get a full refund minus the service fee. The service fee for the 8-week plan is $5. The 12-week fee is $10.

One cool feature of the Sears and Kmart program is a layaway calculator on their site. You can see how much your down payment will be, how much you’ll pay on their biweekly plans, and when you’ll finish paying off your order.

Layaway programs are great to help break up the expense of holiday shopping over the next few months. Putting items on layaway now and making small payments is better than trying to pay off a huge lump sum in January to try and ward off credit card interest payments.

 

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