NDSU Extension Service - Ramsey County


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Layaway or Not?

Layaway or Not?


                A few of the big box stores have brought back layaway plans.  Is layaway a good choice for a smart consumer?  That depends on many different factors.

                If you have a credit card and you plan to pay off your Christmas purchases immediately, layaway is probably not a good choice.  Most layaway plans require either a $5 or $10 service fee per item set and some required a percentage-based down payment. In most cases this figures to be about a 30 % interest rate – probably higher than your credit card!  If you have a credit card, it's likely going to be best to use it instead of layaway, that way, you get your items quickly and you don't need to worry about losing anything if you miss a payment.

                In the case of layaway plans, the fine print can be a serious deal breaker. There are four factors you need to look at when deciding to use layaway: down payment, service charge, cancellation fee, and eligible items. These all vary from store to store,

                Cancellation fees are usually the deal breakers. Typically, you’ll receive your down payment and any other payments made back, but if you miss a payment, you may be assessed anywhere from $10 to $15.  Down payments are typically 25 percent up front; which depending on how many items you plan to place on layaway, can quickly add up.

                Eligible items are usually gift items associated with the holidays, including items like toys, electronics, and jewelry. Also, check if the stores keep layaway items onsite. If items are stored elsewhere, the store may require a few days’ notice before pickup.

                Ask about the store’s return policy.  If you put an item on layaway and then change your mind, what are the charges? Are you able to receive all of your money back/  Is that in cash that you paid or is it store credit only?

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