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8 things you need to know about layaway

Layaway makes its comeback
Layaway makes its comeback

Flip on the TV, peruse a newspaper or visit an online site and you'll discover a host of major retailers offering layaway -- either for the holidays or throughout the year.

"Layaway never completely went away," says Daniel Butler, vice president of retail operations for the National Retail Federation.

For many smaller retailers, especially those in rural locations, layaway has always been "a way they could service their community and be competitive," he says.

While layaway currently lacks the explosive popularity of gift cards, it's a trend that bears watching, says Butler. Depending on consumer reaction, stores offering holiday layaway could extend their programs year-round, and retailers without layaway could make it available, he says.

The smartest move for consumers using layaway is to step back and look at the big picture.

Calculate "exactly what are you paying for the product," says Nadine Samter, attorney with the Federal Trade Commission. It's equally important to note when you can collect your items and what happens if something goes wrong, she says.

Considering layaway? Here are eight things you need to know.

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Layaway hasn't gone away. In fact, some retailers offer it throughout the year, not just for the holidays. Before you decide to put some merchandise on layaway, there are a few things you need to know.

Layaway programs aren't quite the same as they were a generation ago. It used to be that you paid whatever you could, whenever you could, and once you paid the item off, it was yours.

Today, stores may set a maximum payoff period -- usually somewhere between 30 and 90 days. Your payments might be due on specific days and be for specific amounts. The rules, policies and fees can vary, depending on the store.

Consumer watchdogs say you need to read the details carefully and understand what you're getting into before you sign anything. Ask a lot of questions, such as, what happens if I miss a payment?

And what about returns? Some stores have different return policies for layaway merchandise. What if the price drops? Some stores will mark down a layaway item, others will not.



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