Should You Take Advantage of Stores With Layaway Programs?

stores with layaway

Stores with layaway programs offer the opportunity to snag the items you want for the holidays without paying for it all upfront. This time of year has a lot of expenses that fall outside normal monthly spending, and holiday layaway programs can be helpful for tight budgets.

But layaway stores’ policies on these programs vary quite a bit. Most have fees, others require a deposit, and some have a short window for payment. If shoppers aren’t careful when using layaway, they could rack up fees.

Find out the pros and cons of layaway, and how to best use these programs to your advantage.

Stores with layaway during the holidays

Stores that offer layaway allow shoppers to set aside items that they want to purchase. Layaway stores will usually hold items after an initial deposit on the purchase has been made, and customers pay for the rest of the purchase in installments over time.

You might make an initial payment, but the items stay in the store until you’ve paid the full amount. Some stores have rules about how often you have to make a payment. Others have more flexible programs that allow you to pay what and when you can.

If you’re interested in using such a program, you’ll need to know the stores with layaway. Some of the most popular layaway stores include:

If you plan to use one of these stores’ layaway plans, ask an employee to fully explain their layaway policy to you. Make note of important information like fees or time limits associated with using layaway.

Benefits of using layaway store programs

The benefits of using a layaway program to pay for holiday purchases can be worth it for some shoppers. Here are some reasons why layaway could be a smart way to do your holiday shopping.

Pay what you can, when you can

The biggest benefit is getting to claim a popular holiday item even if you can’t afford to pay for it upfront. Shoppers are guaranteed that they will get that item under their Christmas tree as long as they complete their payments on time.

Lock in sales prices

A layaway program might also be used to take advantage of a special sales price on an item.

Maybe a set of speakers you’ve had your eye on goes on sale for one week only, but you only have enough cash to cover half of the purchase price. Put the item on layaway and it will get rung up at the current sales price, giving you a nice discount.

No credit requirements

Paying with layaway means you can pay for an item over time, a process similar to using a credit card to pay. But unlike a credit card, layaway programs have fewer requirements and are available to all shoppers.

For people with bad credit or an income too low to qualify for a credit card, this can make it a smart way to pay. Stores with layaway don’t perform income or credit checks to use the program.

Avoid paying interest

Even if you do have a credit card, using layaway might still be preferable. Many layaway programs provide up to 90 days to pay for a purchase without interest.

If you carried a balance on your credit card and took three months to pay it off, however, you would get charged interest on that balance each month, adding to your purchase costs. Carrying a balance could also raise your credit utilization, which might cause your credit score to dip.

Use layaway instead, and you can avoid interest costs and any negative impacts on your credit.

Drawbacks of holiday layaway programs

Layaway programs do have a few cons that shoppers should consider, too. Using layaway might not make sense for everyone. Here’s what to watch for.

Fees and deposits

Layaway stores’ policies often include a fee that they charge to layaway items. Toys’R’Us and Marshalls, for instance, charge a $5 fee to start a layaway (though this is often waived during free layaway promotions).

Other stores might require a higher deposit. Walmart, for instance, requires a down payment of $10 or 10 percent, whichever is greater. Burlington Coat Factory requires a 20 percent deposit for layaway. If you’re making an expensive purchase, a 10 to 20 percent down payment may be inconvenient.

Cancellation charges

If you use a layaway program, beware of cancellation fees. If you change your mind about a purchase or fail to pay it off on time, most stores with layaway will charge a cancellation fee. This is usually between $5 and $10.

Time limits

Most stores have time limits on layaways, and you must pay for your purchase in full within that time or the layaway is canceled. Marshalls and T.J. Maxx limit layaways to 30 days, while Toys’R’Us gives up to 90 days to pay for the purchase.

Stores with layaway might also place limits on these programs around the holidays. Walmart shoppers only have until December 12 this year to start a layaway contract, and Burlington Coat Factory requires that layaways be paid in full by Christmas Eve.

If you’re unsure that you’ll be able to fully pay for the purchase in the time limit, it might not be a good idea to start a layaway contract. If you fail to meet the requirements, you could face a cancellation fee and lose the hold you placed on the layaway items.

You could miss out on savings

You can use layaway to take advantage of limited-time sales prices, even if you don’t have funds to pay for the item right away. But doing so could mean you miss out on bigger saving that might come later in the season.

This might happen if you make a purchase regularly, too. But if you’re worried about missing a deal, it might be more advantageous to use a credit card.

Many credit cards have price protection. If a better deal on an item comes along within 60 to 90 days of your purchase (depending on your credit card company’s policy), you can get a refund for the difference.

You have to wait

With holiday layaway programs, one of the biggest downsides is having to wait. When you purchase items outright, you own them right away and can take them home. With layaway, you have to wait until it’s fully paid off.

Layaway can be a helpful tool to purchase pricey gifts and is likely a better option than charging your purchases to a credit card. But before buying anything, take a close look at your holiday budget to make sure you can afford the items you want.

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