Christmas displays are already up in most major retail locations; which means holiday shopping is in full swing. Many stores have already rolled out their holiday layaway plans. Some are even offering additional incentives, such as cutting fees and increasing the number of items eligible for layaway.
The Better Business Bureau wants to remind consumers to fully understand the policies associated with a store’s layaway contract to avoid surprise charges or fees. Layaway services are an alternative to using a credit card for the full purchase. When purchasing items on layaway, the buyer will make a deposit, usually a percentage of the purchase price and pay a service or plan fee for the store to hold the item. The customer is then given a time frame when they can make payments and eventually pay off the balance. Once paid, the customer can take the items home.
Not to anyone’s surprise, layaway services have evolved on the internet. Some national retailers allow customers to pay for products with monthly installments directly debited from their checking accounts. Online layaway also saves you the hassle of dealing with long lines at retail stores and you can get your product delivered right to your door.
For consumers considering a layaway plan, BBB advises:
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▪ Plan ahead. Before signing a layaway contract, make sure you have the money to pay for the products. Failure to pay your layaway means you lose the product and any fees you may have paid.
▪ Obtain a written contract. Ask the company for a written contract and read it carefully. Contracts should include when payments must be made and what happens if a payment is late. Each company likely has a different layaway policy, so be sure to read each one carefully.
▪ Confirm how long the item can be kept on layaway. Some stores only hold items for a specific time period and then redistribute them for re-sale.
▪ Ask where items will be stored. Be sure your items will be placed in a secure area until all payments are made so they won’t be sold to other customers.
▪ Read the company's refund policy. Retailers’ policies may differ. Be sure to check if refunds are available and what the refund will be. Some stores may only offer a store credit or will charge a fee.
▪ Understand all the layaway terms and conditions. Find out how much time you have to make all of the required payments, when the payments are due and the minimum payment required. Will you have to pay a restocking fee? If so, how much?
▪ If you’re unsure, ask questions. Are there service fees? What happens to the contract if you are late or miss a payment? Are there penalty fees? Will your contract be canceled? Will the merchandise be returned to inventory? What happens if you change your mind and decide not to purchase the item?
Remember that companies are holding merchandise for you that could be sold to other consumers so it is important you understand the terms prior to obligating yourself. Asking lots of questions up front could help you not feel like a Grinch this Christmas.
For more consumer tips you can trust, visit www.bbb.org.
Kelvin Collins is president/CEO of the Better Business Bureau of Central Georgia and the CSRA Inc., serving 41 counties in Middle Georgia and the Central Savannah River area. This tips column is provided through the local BBB and the Council of Better Business Bureaus. Questions or complaints about a specific company or charity should be referred directly to the BBB at 478-742-7999, www.bbb.org or by emailing firstname.lastname@example.org.