BBB offers tips on layaway contracts for holiday season
El Paso, TX (BBB) — Many retailers have begun to roll out their holiday layaway plans. Some are even offering additional incentives, such as cutting fees and increasing the number of items eligible for layaway.
Better Business Bureau serving El Paso wants to remind consumers to fully understand the policies associated with a store’s layaway contract to avoid surprise charges or fees.
According to the National Retail Federation’s Monthly Consumer Survey conducted in October, 6.9 percent of consumers were using layaway services to purchase holiday items. 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 any service or plan fees for the store to hold the item.
The customer is then given a time frame where 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. Available systems 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.
For consumers considering a layaway plan, BBB advises:
- Plan ahead. Before signing a layaway contract, make sure you can actually come up with the money to pay for the products. Unlike outstanding credit card debt, which will just accumulate interest, failure to pay your layaway means you could 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. Keep in mind that each company may have a different layaway policy.
- Confirm how long the item can be kept on layaway. Some stores only hold items for a specific number of months, and then redistribute them for re-sale.
- Ask where item(s) 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. What happens if you change your mind and decide not to purchase the item? Be sure to check if refunds are available.