The National Retail Federation expects holiday retail sales in November and December - excluding automobiles, gasoline and restaurants - to increase between 3.6-4 percent for a total of $678.75 billion-$682 billion, up from $655.8 billion last year. Historically, electronics and furniture have been at the top of the list for major purchases.
With the holiday season's big spending quickly approaching, using layaway can be a great alternative to cash and credit cards for some shoppers. Big box retailers like Walmart, Toys R Us, Kmart and Sears are again offering layaway programs this year. Better Business Bureau 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 service lets a buyer space out payments on an item over time without using a credit card. A buyer claims the item only after the full purchase price has been paid. Some consumers prefer layaway because they are charged no interest on the payments. When they are buying a present that will be given in the future, it is not important to take the item home right away.
In-store layaway programs vary. Some retailers provide layaway services for items purchased through the retailer's website. Others only allow layaway for items in stock in a store. Some charge a fee or minimum payment to open a layaway account or terminate it. Some allow buyers to use coupons, but only on items that have not been marked down or put on clearance. Some stores expect items to be paid off over a certain length of time, whereas other stores may be more flexible in time frames. Third-party businesses also have sprung up, offering layaway plans for merchandise from retailers that do not 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, BBB recommends you 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?
Is the item in stock? If not, when will it be delivered?
Can I get a refund or store credit if I no longer want the item after making a few payments?
Is there a fee if I decide I no longer want the item?
What happens if the item goes on sale after I have put it on layaway?
Does the retailer or third-party layaway service have a good BBB rating?
You can find a retailer's BBB rating or read a BBB Business Profile by going online to bbb.org or by calling 888-996-3887.
Sean Spence is the Mid-Missouri regional director for Better Business Bureau.