Don’t Have the Cash? Stores Announce Holiday Season Layaway Programs

September 24, 2012  |  

Time for Christmas shopping. Yes… already.

If you don’t have the cash to buy all the presents on your list just yet, one option is layaway — especially if you want to buy toys, gadgets and other items that might be sold out by the time you have saved up enough.

The basics: First you open a layaway account at the store and, in most cases, pay a small service fee. Then you make an initial down payment, typically 10 to 25 percent of the total. When the entire amount is paid, you take your goodies home. But if you  make your payments late or change your  mind, there are extra fees.

Kmart and Toys “R” Us have just announced their layaway programs for 2012.  Kmart is offering free layaway both in-stores and online. The free layaway option is for early shoppers who wish to avoid the risk of top toys selling out. Kmart is offering free layaway from now until November 17, 2012.

Toys “R” Us has launched its “Hot Toy Reservation List” program, allowing shoppers to select their toys early without fear they will be gone at the last minute. Any of the toys on the hot list can be put on layaway with a 20 percent deposit. The “Hot Toy Reservation” option will be available until Halloween (October 31), and Toys “R” Us has free layaway, but terms and the dates of the special layaway programs many vary from store to store. After October 31, there will be a $5 service fee.  Consumers must make a 20 percent down payment and pay 50 percent within 45 days. Items must be paid in full by December 16.

Wal-Mart has eliminated its $10 cancellation fee and lowered the fee it charges for opening a layaway account from $15 to $5. And, Wal-Mart layaway customers will get  their $5 back as gift cards after making their final payments.  The nation’s largest retailer is also offering more time for customers to make their payments—instead of 60 days, they now have 90 days. All items must cost at least $15. Total layaway purchase must be at least $50. Wal-Mart’s layaway program for Christmas started September 16 and runs through December 14.

T.J. Maxx and Marshalls are offering a 30-day layaway program, requiring a down payment of 10 percent of the item’s cost, or $10, plus a $5 service fee. There is a $5 cancellation fee.

Best Buy charges a five percent service fee with a 25 percent down payment. Payments must be made every two weeks over eight to 12 weeks. Items must cost at least $250.

And Sears is expected to launch its layaway promotion in October.

While layaway programs sound tempting, there are drawbacks. “Critics warn that fees for the increasingly popular layaway programs could wind up costing people much more than if they’d paid by credit card,” reports The Kansas City Star . “A layaway purchase is like a very expensive loan that doesn’t allow the borrower to use the goods until he or she pays off the loan.”

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