1. Home
  2. Blog
  3. Saving Money
  4. Layaway Programs: How Do They Work?
7 Financial Mistakes to Avoid When Building Wealth

Say you saw the most divine leopard-print coat, but it was priced at $200. You don’t have $200 or a credit card. Alternatively, perhaps you were trying to avoid using your credit card as you didn’t want to rack up interest charges or ding your credit by charging too much. Is there a way you can hold the item so someone else doesn’t snap it up?

Layaway to the rescue!

What Are Layaway Programs?

With layaway, you don’t have to fret that the item will be gone by the time you’ve collected sufficient funds. Using this service, the store will literally lay your items away until you can come back and buy them. Of course, it’s not an indefinite hold. Instead, you’ll fill out paperwork and make incremental deposits on your items.

Each store will have its own terms and conditions. Check policies for details such as:

  • Which items are eligible (some stores restrict options to jewelry, furniture and other big ticket items)
  • How much the item can be worth; many have a minimum
  • How long you can lay it away for
  • How much you have to pay up front and in incremental payments
  • How much the service fee is, if any
  • How much you forfeit if you cancel your purchase

Let’s find out more about what modern layaway looks like and why you may want to use it.

Are Layaway Programs Still Around?

Indeed, they’re at select stores. Layaway first appeared on the scene during the Depression and flourished over the years. Then as credit cards gained prominence, layaway programs generally fell out of favor while consumers bought what they wanted when they wanted it.

But when the Great Recession hit, layaway started looking a lot more appealing and made a resurgence. Today, layaway programs are offered at select locations. Some only offer them during the holidays while others offer them year-round. Note that many have restrictions about the types of items and price points that are eligible, but the sales associates will be able to help you if you have specific questions.

Pros And Cons Of Layaway Programs

Is layaway right for you? Here are a few factors to weigh.


  • No interest fees: Unlike with credit cards, you won’t accrue interest.
  • No surprises: If you’ve ever gone on a shopping spree and put several items on your credit card, you might have been pretty upset when the bill arrived. With layaway you know exactly what you’ve bought.
  • Available to anyone: Anyone willing to pay the small service fee, that is. If your credit has taken a hit or you’re trying not to use cards, it can be a great option.
  • Guaranteed availability of items: Like that leopard-print coat we mentioned earlier, you don’t have to worry about a hot item being sold out. This can be important if you’re playing Santa this holiday season.
  • Delayed gratification: Some may call this a con, but we’re calling it a pro. You’re learning the discipline of not getting an item until it’s completely paid for.


  • Fees: Most layaway plans require a service charge, and if you decide not to buy the item, some charge a restocking fee. You’ll also need to offer a down payment.
  • Potential losses: Sometimes the money we think we’ll have next month doesn’t materialize. And as mentioned, some stores might charge you a fee for your layaway if you don’t complete the purchase.
  • Strict payment terms: Most stores will require you make periodic payments. Make sure you understand when and how much so you don’t inadvertently miss one and lose your item.
  • Limited availability: Unlike a credit card, layaway isn’t an option for every purchase. Many stores don’t offer it, and those that do might limit the service to certain items and price points.
  • Might miss out on sale pricing: Check to see if you can have a price adjustment if the item goes on sale while it’s on layaway.

Stores With The Best Layaway Programs

Here are some stores that have affordable and easy-to-use layaway programs. Check with your location to verify current details on the program.

  • WalmartWhile Walmart’s layaway services are only available during the “holidays,” they have a broad definition for that. In fact, the program is available from August 30 to December 9. (Certain stores might offer layaway for jewelry year-round.) The program is free with an opening down payment of $20 or 20%, whichever is greater.
  • J. MaxxT.J. Maxx offers layaway at some stores; you can check your local store online to see if it has a “hanger” icon which indicates the service is available. A 10% down payment is required along with a service fee of $5.
  • BurlingtonCheck with your local store to see if they offer it. The fee is $5 but they often have promotions where you get a $5 gift card once you retrieve your items.
  • KmartThe stores offer both 8-week and 12-week options for $5 and $10 respectively. Only some items are eligible so be sure to check for the tag.

Alternatives To Layaway Programs

Wondering how else you can buy an item without putting it on layaway? (Besides cash and credit, of course!) Many millennials and Generation Z-ers are trying to avoid credit card debt, and that’s a good thing, but that doesn’t mean they’re willing to forgo the purchases they want. Instead, they’re turning to apps like Afterpay or FuturePay to help them make purchases: Take it home now, pay later.

While the concept is a little similar in that you’re making smaller payments and avoiding interest accrual provided you pay it off in time, it’s also basically the opposite of layaway where you pick up the item after you paid for it. If you don’t pay off the items on these apps, you could accrue hefty fines.

Still, these apps are available at many retailers (particularly those popular with younger generations) and could be considered an alternative to credit cards and layaway.

Have you ever used layaway? What did you like or not like about it?

Leave a Reply

Your email address will not be published. Required fields are marked *