Layaway is a method of buying merchandise. A consumer makes a down payment on an item which the store then holds for them while they pay the remainder of the price in installments. They can then take possession of the purchased item when they've fully paid for it.

A layaway plan ensures that the consumer will get their chosen merchandise when they've fully paid for it.

KEY TAKEAWAYS

• • The term “layaway” refers to a retail purchasing method in which consumers place a deposit on items of merchandise and then pay the balance over time.
• • Consumers “lay away" these purchases for later pickup at a time when the balance is paid in full.
• • The store retains possession of the merchandise until it's been paid for.
• • Layaway programs are generally geared toward shoppers with limited income who may struggle to pay for purchases in one lump sum.
• • These programs were created during the Great Depression of the 1930s and then declined during the 1980s as the use of credit cards offered another, easier option.

Understanding Layaway

Layaway works for consumers who have limited disposable incomes and are unable to make larger lump-sum purchases. There's sometimes a fee for this type of purchase because the seller must keep the item in storage until the payments are completed.

Layaways can be readily offered to those with bad credit because there's little risk involved for the seller. The item is simply returned to the shelf if the transaction isn't completed. The customer’s money may either be returned in full, returned minus a fee, or returned as a store credit toward a future purchase.

Layaway programs also benefit retailers by allowing them to offer products to lower-income customers as a type of savings plan. The customer has already committed to purchase the product on layaway so they can't succumb to the temptation to spend that money elsewhere.

Online Layaway

Online layaway programs let consumers purchase items via scheduled deductions that are taken from a checking account. This option simplifies layaway for both merchants and consumers by removing associated storage and bookkeeping costs. The layaway items remain housed at the distribution center during the layaway period rather than taking up valuable retail warehouse space.

Retailers often restrict layaway purchases to more expensive items such as jewelry and electronic goods. Smaller items such as toys are typically unavailable for purchase through layaway programs.

Layaway vs. Credit Cards

Layaways and credit cards are both used to purchase items that an individual can't afford to pay for out of pocket. Both have late payment fees as well as penalties for default. They also allow for payment in installments over time.

One of the differences is that an individual can immediately take home an item they've purchased with a credit card. A consumer can only take home an item on layaway after they've fully paid for it. Layaway requires a deposit whereas a credit card does not. You generally won't pay interest on the unpaid balance of a layaway purchase but it can depend on the plan. Interest paid on a credit card purchase can increase the cost of a purchase and send individuals into credit card debt.

Defaulting on a layaway plan won't impact credit scores. We accept a lay-a-way plan for 12 months from the date of purchase, with a 20% down payment. The balance has to be paid with 12 months from date of purchase since we are holding the merchandise. At time of full payment the jewelry will be mailed to you. If you have any questions please don't hesitate to contact us at info@discountgoldanddiamonds.com