Layaway Plans

Layaway, which in some countries is known as lay-by, is a means to obtain merchandise without needing to have all of the money paid up front. It is different from credit cards in a big way: You don’t get the item until it’s completely paid off.

A typical layaway term might be for eight weeks, or 60 days or 90 days. Payments are generally required to be made weekly or every other week.

There may be a cancellation fee assessed if you decide not to complete the payments, but all reputable stores return the payments that have already been made, or offer a store credit. Despite some consumer advocates’ reports to the contrary, it is very, very unusual for a store to require a customer to forfeit payments already made if he or she fails to make all the payments. None of the major retailers listed on this site have such a policy, but read all the terms of any layaway contract before you agree to it.

Layaway is a great help to low-income shoppers, but it is definitely not limited to families in that situation. For example, Kmart’s 2008 holiday layaway campaign is targeted to households with incomes greater than $50,000, according to advertising industry reports.