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Layaway: Not all stores offer it

Jasmina Meyer, Highlands Today

Linda Pausley, sales associate, speaks on the phone at Sue's Cubby Hole Boutique on Thursday in Sebring. The boutique offers layaway to it's customers with 10 percent down and three months to pay off the balance.

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By PALLAVI AGARWAL

Highlands Today

Published: November 20, 2009

SEBRING - When Debra Schriber wants to buy Christmas toys for her two grandchildren, she makes the one-hour drive from Okeechobee to the Kmart store in Lakeshore Mall, selects what she wants and puts them on layaway with the store.

Every week she pays $85 toward her purchase. Close to Christmas, Schriber pays off the balance and picks up her gifts.

For a $5 initiation fee that Kmart charges and a required down payment and payment schedule, Schriber makes Christmas shopping affordable for her budget.

It's a win-win deal for her, she said.

Her grouse? She wishes Walmart, which discontinued its layaway program in 2006, would bring it back.

"When Walmart had its layaway program, I would put everything on layaway," she said.

A Walmart spokeswoman said the discount retailer was not going to resurrect its program anytime soon.

"Currently, there are no plans," said Kelly Cheeseman. "We are instead providing the opportunity to shop at the lowest prices possible."

While Walmart may have retired this old-fashioned purchase plan that was popular in the '20s and '30s, stores like Kmart, Sears and Marshalls still offer that option to their shoppers.

Putting items on layaway dwindled in the days of easy credit but as the economy soured and credit became harder to come by, stores' pay-as-you-go plan started getting popular.

"It's a nice thing for the customer," said Susie Ehrlich, store manager of Sebring's Sears, which introduced layaways last year after several years.

"A lot of people are using layaways for the holidays," she said. Clothing and electronics are the two most popular layaway items, Ehrlich added. Appliances are exempt.

Customers have to put down 20 percent of the purchase price, pay a $5 transaction fee and pay the balance within eight weeks.

The store's layaway plan also extends to its online purchases. And, like most layaway plans out there, a change of heart might cost you. At Sears, there's a 10 percent cancelation fee and customers have to forfeit the $5 layaway fee.

Big box stores are not the only ones that let shoppers pay in installments. At Sue's Cubby Hole, a clothing boutique at the Sebring Square shopping plaza, customers have been putting things on layaway since the store opened 21 years ago.

"It's a service to our customers," said store employee Linda Pausley.

For a 10 percent downpayment and the balance paid over three months, a shopper can put anything in the store down for layaway, from its popular Vera Bradley purses to jewelry.

Pausley herself has put her daughters-in-law's gifts on layaway at the store. It's convenient because you don't have to fork out all the money at once and it lets shoppers squirrel away an item that may be sold out in a few weeks, she added.

Chris Dunn, owner of Williams Pawn & Gun, in Avon Park, also banks on layaways, and not just during the holidays.

The store's repeat customers know about its layaway program. For others who don't, a white sign in front of the store by U.S. 27 passes the word along.

"We've always had layaways," said Dunn. "We are advertising it because of the season."

Customers have to put 25 percent down and have 90 days to pay off the balance. Everything in the store, from jewelry to guns, is available for the installment payment plan, which comprises about 30 percent of the store's business.

Traditional stores are not the only ways to secure layaways.

Online layaway merchant, eLayaway, which bills itself as "The Smart Way To Plan and Pay," lets customers purchase items from merchants offering its payment option.

Members pay a flat transaction fee of 1.9 percent on the initial purchase price.

Using eLayaway's payment calculator, customers can create their own custom payment schedule. Layaway payments are automatically drafted from customers' bank accounts, said Jesse Stickle, director of media relations.

When the final payment is made, the money is transferred to the merchants and the items are shipped, he added.

Some of the popular items that get put on layaway at the web-based business are electronics, housewares, TVs, gaming consoles, ipods, vacuums, and grills. Some of the popular brands are Apple, Best Buy, Home Depot and Family Leisure.

Since eLayaway was launched in August 2006, it's doing pretty good, Stickle said.

"Given the current economic climate we have seen transaction volume double since last December," he added.

Not all stores have a big layaway business.

At Hibbett Sports, customers have 30 days to put an item on layaway after putting 30 percent down and a $3 non-refundable fee, but assistant store manager Taylor Hall said she has seen only one or two layaway sales during her five months at the store.

Some big box stores that offer layaway plans:

Marshalls

Sears

Kmart

Hibbett Sports

What is layaway?

When you buy an item on credit, you take the merchandise home with you. When you use layaway, you typically put down a deposit - usually a percentage of the purchase price - and pay over time; the retailer holds the merchandise for you in reserve. You take the merchandise only when you have paid for the item in full.

Layaway tips

Get the merchant's layaway policy in writing. Look for details on:

•The terms of the layaway plan: how much time you have to pay for the merchandise or service; when your payments are due; the minimum payment required; and possible charges for using the plan, like a service fee. Find out if there is a fee or a penalty for missed or late payments: Will your contract be cancelled? Will the merchandise be returned to inventory?

•The refund policy: If you decide you don't want the merchandise after you've made some or all the payments, can you get a refund? Retailers' policies may differ: some give you all your money back; others may charge a non-refundable service fee; still others may offer a merchant credit for the amount you paid.

•Check out the business. Contact your state Attorney General's Office ( www.naag.org), local consumer protection agency ( www.consumeraction.gov), and your local Better Business Bureau ( www.bbb.org). They can tell you if consumers have filed complaints against the retailer or online service.

•Keep good records of the payments you make on layaway merchandise. They may come in handy if you have a problem with the seller.

Source: http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/al... Source: http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/al...

Pallavi Agarwal can be reached at 863-386-5831 or pagarwal@highlandstoday.com

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