How Does Layaway Work?

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.

13 Responses to “How Does Layaway Work?”

  1. Linda Norris says:

    How do I get started to put items in layaway at this time

  2. admin says:

    Hi. Just call the Toys R Us location (or other store you want to use) nearest you to confirm their procedures. Usually you pay a deposit and pay a little bit over time until it is paid off.

  3. Misty says:

    Does anybody know what stores do layaway in Knoxville, TN besides Kmart. They are way to expensive.

  4. Nicole Hobbs says:

    Does big lots in Marianna fl. have layaway?

  5. donna P. says:

    I’d like to know about laying away washer/dryer. !) the amt. needed down @ layaway 2) length of the layaway allowed for these T/y~

  6. Biggy Small says:

    Why would I do this? Why not just save up & pay for it in full once I saved enough up?

  7. Kevin says:

    @Biggy Small. It’s so that the store can hold on to an item that you really want but can’t pay for it all up front. I’m trying to purchase a 3200 road bike right now, it’s the only size frame that will fit me and it’s the last one that i really want. They won’t reorder the bike because it’s been discontinued for this year. So I’d rather put it on layaway, pay off however much I can within 3 months so I can obtain the bike once i pay it off. Also, it establishes credit as well for someone who doesn’t have credit like me.

  8. kingj0n says:

    So you’re one of the selfish people wanting for yourself, what about the person who saved all that money so they can buy it 2 days after you want to put it on lay-a-way?

    You just took his opportunity away.

    There is no need for lay-a-way.

  9. AW says:


    Your a jack ass (just sayin)

  10. tabitha says:

    wow, pessimist much? Layaway is good for people like me trying to balance paying for school, rent and a car but also wanting to spoil their family on christmas. Don’t write crap putting someone down, there’s no need for that. Ever heard the saying if you don’t have anything nice to say then don’t say nothing at all? Yeah? well follow it.

  11. Lar99 says:

    I love layaway! I am able to gets items for my family and myself and be debt free after Christmas 🙂

  12. allisgood says:

    @Kingjon, Kevin & Biggy Small _ Not only is layaway great to do to help with christmas or whatever u want, but, it lets u put items on hold that r at sale price & u can always check the cost of the items u put in layaway to see if they went down in price. If they r cheaper in price then what they were when u put them there, they will make the adjustment & give u that lower price. Always do price check when u go to pay on ur layaway to see if it at a lower price. As far as helping u establish credit, IT DON’T, layaways dept do not report to any credit agency like credit card companies do & others.

  13. Thrifty says:

    I am also in favor of layaway these days. I did the 1930/40’s version of saving up hard earned cash and buying. I did that exceptionally well and with a lower income and bills, etc during the early 90’s/2000’s. However, with such economic uncertainties right now, unless you have perfect credit or make at least 100,000 dollars a year it isnt very reasonable to use saved up cash for large dollar purchases daily at a store. Saved money should be well…saved money. Should I pay in 1 day for what I can reasonably afford in 1-2 months? hmmm Really, I think issues for stores that provide layaway usually range from whether or not customers will actually pay consistently until balance is paid in full and whether we will change our minds completely cancel the layaway and then demand a refund or whatever. Understandably too when they are trying to make shopping more convenient for us while still earning a profit. So just do your part and layaway will seem like a breeze.:)

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