Layaways Helping Consumers Buy Without Interest, Service Charges

WALLINGFORD — As a growing number of families struggle to prevent sliding further into debt, retailers are trying to help them with a payment option from days gone by: layaway plans.

Layaways enable consumers to gradually prepay for an item with interest-free installments. Once it is paid off, they can take it home.

Connecticut Better Business Bureau President Paulette Scarpetti said these plans help consumers avoid being crushed by credit card interest rates, while at the same time aid retailers keep their holiday inventory moving.

“Layaways help consumers stay within their means, the same way as some people have moved from using a credit card to using a debit card,” Ms Scarpetti said. “The idea is: if you don’t have the money on hand, you can’t spend it.”

Some stores are even providing layaway for items bought on their online sites.

When purchasing on layaway, the buyer is typically required to put down a deposit of 10 to 20 percent and pay any fees for the store to put the item(s) aside on hold. The customer then has one to three months to pay off the balance with periodic payments.

Once paid off, the customer may then take the goods home, avoiding repressive credit card interest rates and overdraft charges. Many major retailers are offering layaway purchases and some third-party businesses are handling layaway plans for retailers that do not have plans of their own.

Connecticut Better Business Bureau has a layaway plan checklist for consumers:

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

*When are payments due?

*How much do I have to put down as a deposit?

*Are there any service plan or storage fees?

*What happens if I miss a payment? Are there penalties? Does the item return to inventory?

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

*What happens if the item goes on sale after I have begun layaway payments?

*Does the retailer of third-party layaway service have a good BBB rating?

BBB advises consumers to get all terms, conditions, and any verbal representations in writing.

More tips and information on being a smart buyer can be found at www.bbb.org and the Federal Trade Commission (FTC) offers more information on layaway plans at www.ftc.gov.