What you need to know about layaway plans

Published 12:00 am Wednesday, November 20, 2013

Layaway has become increasingly popular with the challenging economic times. Consumers can layaway electronics, toys and jewelry at a variety of stores, including national chain stores, local retail stores and pawn shops.
“Layaway options work well for people who need to make payments on gifts,” said BBB President Tom Bartholomy. “However, you may end up losing money if you don’t read the contract carefully.”
The BBB has received hundreds of complaints from consumers whose layaway purchases went awry. If you are considering layaway plans, the BBB has these tips:
Pay by credit card. Credit cards come with some buyer protections (charges can be disputed if the product is not delivered).
Read the fine print. Ask the company for a written contract for the layaway and read it carefully. Keep in mind that layaway policies may differ from one company to another.
Layaway period. Ask how long the item can be on layaway. The length of time that items can be placed on hold varies from store to store.
Merchandise holds. Find out if the item being placed on layaway is put on hold immediately or when it is paid for. Some consumers were informed that the product they were paying on had been sold to another consumer.
Payment dates. Make sure you know the specific date when each payment must be made by. If a payment is not made by that date, the layaway item can be sold to another consumer or returned to stock, and you may lose the money you have paid down on it.
Refund policy. Read the company’s refund policy carefully. Is there a restocking fee? Will a store credit be issued? Can you get a refund? “Consumers report not being able to obtain a refund or a store credit if they change their mind about buying the item put on layaway,” added Bartholomy. “In addition, complaints state that restocking fees of 10 percent or more are often charged.”
Order date. If the product is not in stock, be sure to find out when it will be ordered. Will it be ordered when the layaway is opened or when the last payment is made? Consumers report that some items are not ordered until after the last payment is made and then the product is not available.
Delivery dates. If the product you have on layaway has to be delivered to you, make sure that the delivery date is listed in the contract. Consumers report delivery delays due to the product not being available or other consumers having their delivery dates scheduled before layaway customers.
Layaway fees. Make sure you find out if there are any additional fees to layaway merchandise. You should also find out if the additional fees will be refunded if you cancel the layaway.