Connecticut Better Business Bureau Cautions Consumers to Read the Fine Print for Layaway Plans

HARTFORD, Conn. - Oct. 7, 2013 - PRLog -- Retailers Offering Sweet Layaway Deals as Holidays Approach

It’s never too early to start shopping for the holidays, and retailers already have rolled-out their layaway plans for 2013, including seasonal specials for which some fees have been waived.  However, Connecticut Better Business Bureau recommends consumers understand that some fees may still apply, and that they will have to pay a price if they default or cancel.

Layaway plans were introduced during the Great Depression of the 1930s, but were largely abandoned in the 1970s because of low interest rates and the emergence of store credit accounts.  They have since made a resurgence in what is a win-win deal for consumers and retailers.  Consumers don’t have to pay interest charges and retailers benefit by being able to move their inventory early.

“Layaway plans usually involve putting down a deposit, making a series of payments and then taking the merchandise home when the payments are done,” according to Connecticut Better Business Bureau President, Paulette Scarpetti.  “However, like any other contract, consumers should carefully read all terms and conditions before signing a layaway contract.”

Layaway plans are particularly popular with consumers who have poor credit or who don’t want to end up with big post-holiday bills.  The main advantage is that a consumer can lock in an item at a fixed price, and is guaranteed the seller will have the item in stock when it is time to pick it up.

Although several major retailers, ranging from toy stores to big box outlets, have dropped an “upfront” layaway fee of $5.00, other fees may apply, and buyers can be hit with a $5.00 to $20.00 cancellation fee if they change their mind.

Layaway plans, their terms and exclusions differ from one store to the next, and certain types of merchandise or marked down items may not be eligible.

Connecticut BBB recommends consumers ask lots of questions before signing-up for a layaway plan:

•Are there any applicable service, storage  or shipping fees?

•Can I obtain a refund or store credit if I no longer want the item after making a few payments?

•What happens if the item goes on sale after I begin making payments?

•What are the penalties if am late or miss a payment?  Does the merchandise return to inventory?

•How much time do I have to pay off the item?

•Are fees waived for all layaways or only a promotional holiday period?

Make sure you know how many payments are required, the length of the plan and payment and merchandise pickup deadlines.

Be careful with online layaway purchases. A seller may not order the merchandise before it is paid off in full,  and some consumers who've used online plans complained that their item was out of stock by the holidays. Better Business Bureau recommends shoppers ask in advance where their merchandise is being held and what the refund policy is if items are out of stock.

Some retailers use third parties to administer layaways.  Check http://www.bbb.org to verify other consumers’ experience with these companies.