Things to consider before starting a stockpiling plan
When times get tough, layoff plans tend to thrive. This was the case during the Great Depression, when cost-conscious buyers needed easier ways to shop. So they bought items in installments, periodically donating money to the store until they paid off the total. Layaway fell somewhat out of favor for a while, especially when credit card entered the scene in the 1950s and 1960s, but plans began to make a comeback during the Great Recession. And during this year’s pandemic holiday, the layaway will likely be popular with some shoppers.
If you are considering using a layaway plan, here’s what you need to know, from how to get the most out of it at stores that offer layaway programs.
What is Layaway and how does it work?
Layaway plans are designed for buyers who want to shop but may not have all the cash. Layaway is basically a installment payment plan, where you pay for the merchandise over a period of weeks or months. Instead of paying for an item after you receive it – as is often the case with credit cards – you make layaway payments before you receive your purchase.
Most people who want to buy something but don’t have the funds will wait until they have more cash before making the purchase. So why use a layaway plan?
In some cases, you may be worried that the item will not be available by the time you have enough money. If money is tight, you might worry that you don’t have the discipline to save specifically for those purchases. This is where a layaway program can come in handy. If you pay a store $ 50 for a $ 300 giveaway, you’ll likely make sure to keep making periodic payments and end up buying the item.
If you’re running out of cash, but a store doesn’t have a layaway plan (Target, BestBuy, and Amazon.com don’t offer one, for example), you might consider checking to see if they have one. “buy now, pay later” installment plan program.
These programs are not quite the same as the Layaway, which follows a “pay now, buy later” payment plan. With these payment plans, you receive the goods immediately and pay in installments. Just like in a layaway plan, you usually don’t pay interest as long as you make your payments on time. If you don’t make your payments on time, you’ll end up spending extra money (which is also the case with the layaway).
The advantages and disadvantages of exclusion programs
The main advantages of a layaway program:
- You don’t have to pay for the purchase all at once, and you can stagger payments.
- No credit check required.
- No interest is charged.
The disadvantages of a layaway program:
- You pay according to the layaway plan schedule, not yours.
- There are usually fees, such as service, restocking, and cancellation fees.
- You can get a refund if you cancel or don’t make all of the payments, but the program fees are generally non-refundable.
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Of course, there are other advantages and disadvantages. For example, a major benefit of using a layaway program is that you don’t have to worry about go into deep debt. Best of all, if you’re having trouble making payments, your credit won’t be affected, says Zachary Johnson, associate professor of decision science and marketing at the Robert B. Willumstad School of Business at Adelphi University in Garden. City, New York. Layaway can be a smart idea for consumers who not have strong credit, he says. “This gives the consumer the ability to purchase an expensive product with payments on a weekly, biweekly or monthly basis.”
But if you’re struggling with credit and money in general, a major downside can be the fees associated with layaway programs. A rule of thumb: The more you pay for the merchandise, the less the fees matter, says David Friedman, a law professor at Willamette University in Salem, Ore., Who specializes in behavioral economics.
“Layaway fees at most retailers can be quite low – like $ 5 or $ 10,” Friedman says. Because of this, it would hardly make financial sense to put a $ 100 toaster aside, ”he says, explaining that an extra $ 5 or $ 10 means the toaster really costs 5 to 10. % more expensive. But if you use a layaway option to buy a device with a price tag of, say, $ 2,000, says Friedman, that $ 5 or $ 10 is less than 1% of the total cost.
Keep in mind that if you cannot complete the purchase, you will lose money because of the associated fees. For example, if you have to pay a non-refundable fee upfront, you won’t get them back. Additionally, you may have to pay cancellation fees and lose extra money. So while it may seem like a no-brainer to do a layaway program, if you are living paycheck to paycheck, you may still be taking a financial risk.
Stores with shelving plans
If you’re looking for a layaway program, here are the popular stores that offer it:
- Burlington and Baby Depot in Burlington.
- Kmart and Sears.
Walmart’s 2020 vacation schedule lasts from August 28 to December 14, though some stores offer year-round jewelry layaways. The program doesn’t cover everything – you won’t buy a bottle of wine or a bag of crisps as a layaway – but you can buy plenty of gift items, including some electronics, furniture, toys and sporting goods.
Also keep in mind that the promotion is only available in stores. You will pay a deposit of $ 10 or 10% of the purchase price, whichever is greater. You can only put things on hold if the total purchase is $ 50 or more, but individual items of $ 10 or more can be part of that $ 50. There is no specified time that you must make payments during the layaway period; you can make payments anytime until December 14th until you have paid for the purchase or purchases.
Burlington and Baby Depot in Burlington
Both stores offer layaways year-round, but the program itself is typically a 30-day in-store layaway option. To participate, you must deposit a deposit of 20% or $ 10, whichever is greater. There’s also a $ 5 non-refundable service charge, although in some cases promotions will override that by giving you a $ 5 gift card for in-store purchases. If you cannot make all of your payments or if you cancel the layaway order, a $ 10 cancellation fee will be charged in most states (plus tax where applicable).
Kmart and Sears
Both stores, which are owned by the same company, offer in-store layaway options and online layaway programs. You can put items on hold for eight weeks if you layaway online and 12 weeks if you make a purchase in the store and the purchase is $ 300 or more. You have to make layaway payments every two weeks. You also have to make a deposit of $ 10 and the cancellation fee is $ 10 or $ 20, depending on whether you have opted for an eight or 12 week layaway program. There is also a service charge of $ 5 and $ 10, depending on whether the layaway was eight or 12 weeks. If you can’t pay for the entire purchase, you’ll get a refund less service and cancellation fees.
Gamestop has a layaway program with fairly flexible terms. There is a $ 25 deposit and you don’t need to make regular payments, although weekly or bi-weekly deposits are encouraged. There is no charge. You will not be able to do this through the website; you will need to make your arrangements with the actual location of the brick and mortar.
Many Hallmark Gold Crown stores have layaway programs from July through December. You can put an item on hold for 90 days – inside the store, not online – and simply ask the store associate if you can put the item on reserve. You will need to pay a minimum of 20% of the total purchase amount and you will receive a written copy of the terms and conditions (which vary by store).
Copyright 2020 US News & World Report