Layaway has taken a backseat to other more popular options including credit cards and buy now pay later stores, but it’s still an option at many stores.
Layaway is different because you don’t get the merchandise right away, so consider that before you choose between buy now pay later and layaway.
What is Layaway?
Rather than receiving your item now and paying for it over time, you pay for the item before you receive it. You’ll still pay it over time, but before you have the product in hand.
The terms vary by store and the price of your purchase. Most people use it when they’re worried the item won’t be in stock any longer before they are able to save enough money. Some people prefer layaway over buy now pay later or some stores only offer one or the other, not both.
How Does Layaway Work?
Layaway allows you to spread out the payment for a purchase over time. Here’s how it works.
- Pay a deposit
- Find out the store charges a service fee, if so, it may be due with the deposit
- Make installment payments based on the frequency you can afford or required by the store (some require weekly or bi-weekly payments)
- Pay your item off and bring it home
What to Think about Before Choosing Layaway
Before using layaway, it’s important to understand not only how it works, but also what it might cost you. Here are the top considerations when thinking about layaway.
Every store has a different deposit requirement. Some are as high as 20% or more of the purchase price. Make sure you can afford the required deposit before choosing this option.
This is the largest concern with layaway. Unlike buy now pay later installment loans which don’t cost anything, layaway often has service fees, cancellation fees, and other fees. Ask upfront what the program will cost you and if any of the fees are refundable (they usually aren’t).
Each store has its own payment requirements too. Some allow you to pay how you want, but others have a strict schedule. Before choosing this option, find out what they require.
Time to Pay
Always find out how long a store will hold your items. Some require full payment within 30 – 60 days and others give longer time to pay.
On average, most stores offer layaway during the second half of the year when most people shop for the holidays. Many stores offer year-round layaway but it’s not as common as it used to be, so always ask.
Related read: 7 Big stores that accept BNPL
The Advantages of Layaway
Like buy now pay later stores, layaway has its benefits too including:
- You don’t have to pay for the entire purchase up front
- You won’t rack up credit card debt or pay interest
- Stores don’t check your credit for layaway
- You can budget for a purchase rather than being impulsive
The Disadvantages of Layaway
Layaway isn’t for everyone. Here are some disadvantages to consider:
- Some stores have strict layaway requirements that may not fit within your budget
- Most stores charge a fee, whether a service fee or cancellation fee
- Fees are not refundable if you cancel the purchase
The Top Stores Offering Layaway
If you think layaway sounds like a good way to get the purchases you need, here are the top stores offering the option.
Burlington Coat Factory
Get all your coats and clothing needs for the entire family at Burlington Coat Factory. They also sell a large selection of household and baby goods, making it easy to get everything in one place. Here’s how their layaway works:
- Make a deposit of $10 or 20% of the purchase, whichever is greater
- Pay the $5 service fee and $10 cancellation fee (non-refundable)
- Make payments in installments as you can
- Take your purchase home
Some Hallmark stores (not all participate) offer layaway from July to December. They hold items for just 90 days, though. Here’s how their layaway plan works:
- Make a 20% deposit
- Make payments as agreed (read your agreement)
- Take your purchase home once paid in full
Get all your trendy clothing at Buckle and pay for it over time with layaway. Since Buckle’s prices are somewhat steep, it’s a great way to afford the products you want without charging it. The nice thing is Buckle doesn’t charge any fees. Here’s how their program works:
- Make a 20% deposit
- Make payments every two weeks (recommended)
- Items must be paid in full within 60 days
- Take your merchandise home
GameStop is your one-stop shop for all your gaming needs. In addition to buy now pay later options, they also offer layaway. Here are their terms:
- Make a $25 deposit
- Pay on your terms
- Take it home when you pay it in full
You can also make payments by trading in old games or consoles and getting credit for them, applying it toward your purchase.
Alterative to Layaway
If your favorite store doesn’t offer layaway, inquire about buy now pay later options. Many stores work with companies like Affirm or Klarna and offer the option to pay for a purchase in four equal installments. The difference is you get to take the items home when you purchase them and not when you pay them off in full.
Related read: 7 stores that offers BNPL that you already know
Layaway isn’t as popular as it used to be, but it’s still an option in some cases. Because it has fees and there are stricter requirements regarding the timeline, you may want to look at all of your options.
If you choose layaway, make sure you can pay the item off in time and the fees charged are affordable. Compare your options including layaway and buy now pay later with each store, as some stores offer both options, making it easier to afford the items you need.