Should layaway go away?
A tweet by @CNNMoney_News lead me to an article about the increasing number of consumers who are using layaway plans to pay for back to school supplies. Honestly, I didn’t even know that layaway was still a thing. In fact, my only experience with layaway is when I pass the abandoned desk at my favorite discount retailer.
Since I am in the store a lot more than I should be (another story for another day!), I had the opportunity stop by the unmanned desk yesterday to see what layaway was all about.
The first thing I noticed was that it took more than ten minutes for someone to notice that I was standing there. During my time, I read the terms. In a nutshell:
-It costs $5 (plus tax) to put something on layaway
-You must put a down a deposit of $10 or 10% (whichever is more) to hold something
-You have only 30 days to pay in full
-If you don’t pay in 30 days, there is a $5 fee (plus tax)
-You can’t put sale items on layaway
-Some full price items are not eligible for layaway (at their discretion)
-You don’t get to take the item until it’s paid for
-If the item goes on sale while you’re paying, you don’t get the discount
-There is a $5 fee (plus tax) if you change your mind
Wow, with a sales pitch like that, who could resist?!
I should also mention that they accept cash, checks, and (drum roll please) CREDIT CARDS! So not only do you have the opportunity to pay fees for the privilege of holding something you can’t afford, but you can also pay interest! Sarcasm aside, I truly wonder why this payment option hasn’t been retired.
Perhaps layaway made sense when “stuff” and credit were scarcer, but we seem to have an abundance of both today. My advice is to save up your money and then go buy what you need.
Note: This is a good time for me to remind readers that my opinions on this blog do not necessarily reflect the opinions of Money Management International.