Is layaway a new plan to save?

Remember when…buyers paid cash or wrote a check? There were no debit cards to swipe or phone apps to scan. Credit cards? Consumers without a steady job and permanent address couldn’t get one. We needed to save up – or use “layaway.” Layaway?!


Americans’ mindset about saving and spending is radically different today than it was when I got my first summer job. My five siblings and I all started part-time jobs when we turned 14 – and we deposited most of each paycheck into savings.

“Just put it in the bank for safekeeping,” Mom always urged. “You can take it out when you find something to buy.” So we did.

Having a savings account was Standard Operating Procedure. Of course, once the money got into that bank account and we felt the power of compound interest, it was almost painful to take it out and see the balance go down. We usually didn’t do it.

Oh we would go window shopping and buy a few trinkets, sodas, candy bars or movie tickets. That was “just peanuts.” It took some hard thinking to withdraw our savings to buy higher ticket items.

Many consumers did the same. At the time, stores would offer easy “layaway” plans in an effort to create wants and entice some impulse spending. Layaway?!

Yes, if you found something you wanted – like a bicycle or electronics – you could make a very small down payment. The store would hold that item until you paid off the balance. You made regular payments to whittle down the balance over the next few months, and usually there was no fees to use the layaway plan. This strategy was especially popular for parents who wanted to reserve Christmas presents before the hot items flew off the shelves and didn’t want to hide the surprises at home.

With the advent of easier credit access, these layaway plans all but disappeared. But for many retailers, layaway made a comeback when the Great Recession about 10 years ago made consumers skimp on shopping.

Using layaway offers you a great way to budget and not overspend. But before buying in, check the store’s policy and read the fine print:

  • Is there a fee to start the layaway account? If so, how much?
  • What are the terms of making payments? Is there a minimum?
  • Does the layaway plan only apply to certain items or models?
  • How much time do you have to pay off the balance?
  • Can you return a layaway item?
  • Do you get all your money back if you decide not to take the item?
  • How do you get a refund and how much time to get your money back?
  • Does matching a competitor’s price apply if you find the item cheaper elsewhere?
  • How do you pick up the item when the balance is paid? Do you go to a different location?
  • For what reasons can the retailer cancel your layaway?

Look for layaway plans at these stores, among others:

  • Kmart
  • Walmart
  • Sears
  • Burlington Coat Factory
  • ToysRUs
  • BabiesRUs
  • Marshalls
  • J. Maxx
  • GameStop
  • The Buckle

Have you ever used a layaway plan?

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