Store layaway plans provide consumers with an option, providing the opportunity to buy products without a credit card and without having “cash on hand” to pay the full price.
Instead, consumers pay over time, with the retailer typically holding onto the product until it is paid for in full.
While useful for many buyers, the Federal Trade Commission reminds consumers that it is important to understand fully the terms of a particular layaway plan before entering into it. Plans can differ.
The FTC suggests consumers make sure they know the time period they have to pay for products, payment due dates, minimum payment requirements and any fees or other charges and possible penalties associated with a plan.
For example, consider: Are there any penalties for late payments or missed payments? What is the plan’s refund policy? If you later decide you do not want an item, can you return it for a refund?
Some plans may refund “all your money back”; some charge “a non-refundable service fee,” while others may provide not cash, but a store credit for returned items.
Also, the FTC urges consumers to keep good records of layaway plan payments, in case there is a problem about what you have paid.
For more information, see “Layaway: Another Way to Buy” at www.ftc.gov .