Considering Layaway For Holiday Gifts? BBB Has Tips

Buying on layaway seems like a throwback to the Depression. Yet many stores have begun promoting the service, which allows shoppers to buy gifts and other items by paying a little at a time for several weeks or months.

Is layaway a good deal? That depends on the fees a store charges and your own situation. Many people use credit cards to buy items they don't have the cash for and pay later. However, credit card interest rates tend to be high, so you will pay a lot more than the item's value if you don't pay the balance off every month.

Fees for layaway vary, so it's important to ask about them and understand how layaway works at the store where you're making the purchase.

In these precarious economic times, you may also want to consider whether the store has staying power. What would happen if the store went out of business? Would you lose the item you were paying for as well as the money you had paid.

Today's BBB release has some questions you should ask before putting items on layaway. Here goes:

St. Louis, Mo., Sept. 14, 2012 – With Wal-Mart and other stores offering deals on layaway, consumers may find this old-fashioned concept attractive for holiday purchases.

The Better Business Bureau (BBB) advises consumers to read and understand a store’s layaway contract before agreeing to place items on layaway. Otherwise, they could be surprised by fees or other charges that could add to the cost of their purchases.

“Layaway services can be a great alternative to a credit card,” said Michelle L. Corey, president and CEO of the St. Louis BBB. “But it’s imperative that customers understand the fine print and know what to expect.”

The layaway concept dates 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 few years. This year, several chains have reduced fees and increased the number of items eligible for layaway.

As a complement to in-store layaway, some retailers provide online layaway services for purchasing items through the retailer’s website. Third-party businesses also have sprung up, offering layaway plans online between customers and retailers that don’t have their own layaway program.Customers make periodic payments to the third-party layaway service provider. Once the item is fully paid for, the business then buys the item from the retailer and ships it to the customer.

When buying items on layaway, the BBB advises consumers to get everything in writing and offers the following checklist of questions to ask:

• How much time do I have to pay off the item?
• When are the payments due?
• How much do I have to put down?
• Are there any storage or service plan fees?
• What happens if I miss a payment? Are there penalties? Does the item return to inventory?
• Can I get a refund or store credit if I no longer want the item after making
  a few payments?
• What happens if the item goes on sale after I’ve put it on layaway?
• Does the retailer or third-party layaway service have a good BBB
  rating?

You can find out a store’s BBB rating or read a BBB Business Review by
going online to www.bbb.org or by calling 314-645-3300.

Follow the BBB on Facebook or on Twitter @stlouisbbbeditor.