Ovation: With Only 97 Days Until Christmas, It’s Really Not Too Early To Layaway.
Last week there was a bit of a brouhaha when several retailers began to advertise for the holidays. Touting their layaway programs, stores like K-Mart, Wal-Mart and Target have begun to lure holiday shoppers by reminding them that they can make holiday purchases now and pay over time. As in years past, layaway programs offer consumers the option to remove items from store shelves to be paid for over time. But this year, many retailers will not be charging up-front fees for the service.
“A lot of retailers expect this to be another big year for layaway. Layaway has re-emerged as a budget-savvy way to keep family spending in check during the holiday shopping season.” – Kathy Grannis, senior director of media relations at the National Retail Federation.
Some stores will, however, be charging a cancellation fee if customers don’t pay off their purchases in full so it’s important to check. The “free” holiday layaway program at Toys R Us, for example, has a ten dollar cancellation fee and Sears will be charging fifteen dollars to cancel.
I think a larger cancellation fee would even be warranted since it would discourage people from frivolously putting things on layaway and really make them think about a purchase before buying something on impulse. But the details of the program shouldn’t be hidden in the fine print of an agreement. These fees should never be a surprise.
“The cancellation fee is often hidden in the fine print which could be easily missed by someone who sees ‘Free Layaway’ in the bold headline and does not read all the details about the program – which is most of us. Layaway used to be simple, but not anymore. There are lots of rules and there is no uniformity. Even with Kmart and Sears, different rules apply and they‘re owned by the same company.” – Edgar Dworsky, founder of ConsumerWorld.org.
I’ve only used a layaway program one time. It was many years ago, before I began my gift card routine, when I came across what I thought was a wonderful sale. I was short on cash and they only had a couple items left in the store so I, essentially, put one on “hold” in the back of the store until I could come back and pay it off the following week.
Layaway can be a great way to plan ahead for major purchases and help you stick to a budget, especially when funds are limited. It lets you spread the cost of an item over a number of payments without running up costly debt. Any fees that you may pay using a layaway program will undoubtedly be lower than fees that you would pay to a credit card company. So, even if you put something on layaway now, at a slightly higher price than you might charge it to your VISA as Christmas approaches, you might still come out ahead.
With only ninety-seven days until Christmas, there’s not all that much time left to “shop on time!”
Have you ever used a layaway program?
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