Take Another Look at Layaway

by Stephanie Berenbaum – July 30th, 2012

Your Grandmother’s Stylish Secret

You know how much Fab & Fru just loves a good vintage find, right?  Well, today we explore a blast from the past concept that is totally Fab & Fru: good, old-fashioned layaway plans!

Unless you’ve seen back-to-school KMart commercial recently, some of you may not even be familiar with the concept of a layaway plan, but you should be.  It turns out that looking to the past may be just what we need to get a grip on our financial futures…

So What Is A Layaway Plan, Anyway?

A layaway plan is basically where you pay for something in installments – but you do not get the item until you finish making the last payment.  And while some might think the notion of not receiving an item until you have actually paid for it in full is old fashioned – we think it’s just plain smart!

Though plans vary from store to store, the basic plan usually involves paying a nominal fee to open an account ($5 or so) putting down an initial deposit (20% is common) and making regularly scheduled payments over a set amount of time until it is paid off.  Unlike credit cards, no interest is charged over time, but also unlike credit cards – you don’t get the item until you have actually paid for it in full! 

Credit Card Culture

Before the advent of easy credit, layaway plans were common at even the finest boutiques.  However, once the instant gratification of credit cards took hold of America, most stores phased out layaway plans.  It went from being a practical way to buy things to being seen as something only for lower income people who could not get credit.  As we all know, the credit card culture of “buy it now, pay for it later” became the new normal– even if that meant racking up huge interest charges and buying things you couldn’t really afford!

Buyer Beware

Of course, layaway plans can have their drawbacks too.  Be aware that rules vary from store to store!  Also, be sure to read the fine print – regarding service fees to open the account as well as fees if you miss a payment or cancel your order.  So, if you don’t stick to your end of the bargain, well – layaway doesn’t end up being such a bargain after all!

The New Trend

With the economy in the dumps and more people credit-constrained, layaway has been making a slow and steady comeback.  Currently, a lot of the big chains including Best Buy, KMart, Marshalls, Toys-R-Us and Sears offering layaway plans.  An added feature now is that may also offer an online layaway option – giving a modern twist to an old idea!

One trend we’d love to see more of?  Higher end retailers offering layaway – rather than endlessly pushing their store-brand credit cards on us…  One thing is for sure – only buying things you can actually pay for in full will always be in style!

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One Response to “Take Another Look at Layaway”

  1. Simone says:

    In our grandmerother’s time, when layaway was very popular, stores only had sales a couple of times a year. For clothing, it was July and January, and Columbus Day weekend were always the coat sales.
    Today, the stores have so many sales my question is, what happens if the item you buy goes on sale before you’ve finished making your payments? Is there a price adjustment? If not, then the layaway plan doesn’t seems like a good deal. You could end up paying $100. for a dress that goes on sale for $80. but you don’t get the dress until you’ve paid your $100. However, the person who bought it on a credit card for $80. gets to wear it immediately, and even if she pays $10. in finance fee’s, she’s ahead of you.

Any Thoughts?