How to Purchase by Layaway

For those times when you're strapped for cash and you don't want to--or cannot--dip into your credit cards, buying an item on a layaway plan can be an excellent alternative. When you purchase by layaway, you put a down payment on an in-store item and the seller agrees to hold it for you until you pay for it in full. Then, you make payments following an agreed-upon schedule until the item is yours.

Instructions

Difficulty: Moderately Easy

Things You’ll Need:

• Down payment
• Income

Buy Goods on a Layaway Plan

1. Ask the store owner if he offers a layaway plan. Some do, others may not. Each individual business owner decides for herself if she wants to offer layaway plans to customers.
2. Obtain a written copy of the store's layaway terms. An oral agreement will not suffice, even at a neighborhood store where you're known to the owner and employees.
3. Review the terms of the store's layaway plan. Before you part with a single cent, you should know, at minimum, the following information: how much your down payment will be, how long the seller agrees to hold the item, how frequently you are expected to make payments and how much those payments are expected to be.
4. Protect yourself by having the merchant sign off on a written description of the item being held. Make sure you're aware of the store's refund policy for layaway purchases and any other terms and conditions you'll be expected to abide by.
5. Expect that some merchants may demand additional costs as part of the layaway plan. The seller is, in essence, doing you a favor when she agrees to let you buy something on layaway. Some sellers attach a price tag to that favor.
6. Make the payments on your purchase as per the terms agreed upon. If you are going to have trouble making a scheduled payment, contact the merchant as soon as possible. Avoid dealing with any business that includes the ability to resell the item and keep your money if you miss a payment as part of the terms and conditions of the plan.
7. Continue to make scheduled payments until you have paid for the item in full.

Tips & Warnings

• Purchasing by layaway can be a valuable teaching tool for young children. If your little one has her eye on an item that is too big for her wallet, have her pay for it herself through layaway. You'll be contributing to both her self-confidence and her developing fiscal sense.
• Make sure you check into the reputation of any merchant with whom you're considering paying via layaway plan. Beyond word of mouth, check with the Better Business Bureau to see if the merchant has had any formal complaints filed against it.
• Keep your layaway term as short as possible. If the store goes out of business before you've fully paid for your purchase, the money you have paid towards the item is very likely to be lost.