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Should You Take Advantage of Layaway Programs?

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Layaway programs may seem like something from the past or something your parents may have talked about around the holidays, but most of these programs are still alive and kicking. Every layaway program has its fair share of Pros and Cons that you must consider before signing on that dotted line. I’m going to list a few reasons why someone might want to use them and why some people should not use them.

What is a Layaway Program anyway?

Layaway works differently than shopping with cash, a credit card or using an installment billing plan provider by the retailer. With a layaway program, you’ll make payments over time, but your purchases will stay in the store until you finish paying for them. Wikipedia defines a Layaway Program as: “An agreement in which the seller reserves an item for a consumer until the consumer completes all the payments necessary to pay for that item”.

How does a Layaway Program work?

Every store has their own layaway guidelines, but most programs follow these basic rules:

  1. You pick out the items that you’d like to put “on layaway”. Some stores only offer items to layaway from certain departments like electronics or jewelry.
  2. You make the first initial payment or a down payment. The payment amount will vary by store. Some stores will let you choose the amount yourself, but others will charge based on the total purchase price. Ask questions before signing that layaway contract.
  3. The item or items will remain in the store. You’ll make small payments over time to the store. You can make weekly, bi-weekly, or monthly payments, depending on that particular store’s layaway policy.
  4. Once you pay off the total purchase price (plus any associated fees), you can finally pick up your items and take them home. Some stores offer layaway at no extra cost or with no fees. Others will require a small layaway fee to help offset the cost of bookkeeping and storing your items for you.

What are the PROS to using a Layaway Program?

Layaway programs became common during the Great Depression as a way to help consumers make purchases when using credit was pretty much nonexistent at that time. One of the major benefits to using a layaway program is NO interest. If you made that same purchase using your credit card chances are, you’re going to pay a decent amount of interest.

Another benefit of layaway programs it that the item or items are held for the customer, so he or she knows that the items will be available later on. You don’t have to worry about someone else buying it or if that item happens to be discontinued. This can be a time-saver during the busy holiday season when certain items tend to sell out quickly.

If you don’t have all of the money upfront to purchase something and you don’t want to use a credit card or open up store credit, you can always turn to layaway. It provides an alternative to using credit to pay for your purchases; layaway provides another method of payment. If this is the case then layaway may be the best option for you.

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Some retail stores like Kmart, Toys R Us, and Sears offer layaway for purchases made through their online stores. You can add items to your online shopping cart and then add them to their online layaway program. Online layaway saves you the hassle of dealing with grumpy holiday shoppers, standing in long lines, or driving to several stores to look for one specific item. Talk about being super convenient!

One more additional perk is flexibility. If the consumer thinks that he or she will have difficulty making the payments, a new payment plan may be negotiated. Most stores will work with you to make sure it’s affordable and that you’ll hold up your end of the bargain with on-time payments.

What are the CONS to using a Layaway Program?

Some programs have fees, and some are completely free. It all depends on the store’s policy. If they do charge fees you could get hit with several including, a service fee, a cancelation fee, a restocking fee, etc. Always make sure you are crystal clear on that store’s layaway policy before you sign up for it.

Most places will require a down payment or a first payment to hold your item. Sometimes these payments can be a small fee, but other times if they are based on the total purchase price and you’re buying an expensive item, the down payment can be pretty high.

Be careful because some layaway programs come with strict payment conditions. A merchant may require you to make a payment in-store every 2 weeks until you pay off the purchase. That means you’ll have to drive to the store every time just to make a payment. That’s not convenient at all! Also, some stores may require that you make your final payment by a certain date. If you miss that date, you risk losing that item.

Not everything in the store will qualify for a layaway program. A retailer may only offer layaway for electronics, jewelry, or other expensive items. Some stores may place a minimum dollar limit on their layaway program as well. For example, you would not be allowed to put any item with a price tag beneath the dollar limit on layaway.


Layaway programs can be beneficial depending on your situation and the store’s layaway policy. Look into layaway programs this holiday season to help minimize credit card debt and to reap the benefits. Just watch out for the CONS mentioned above. I hope you have a wonderful holiday shopping experience this year!


Author: Lauralynn Mangis
Lauralynn is the Online Marketing Specialist for AdvantageCCS. She is married and has two young daughters. She enjoys writing, reading, hiking, cooking, video games, sewing, and gardening. Lauralynn has a degree in Multimedia Technologies from Pittsburgh Technical College.