8 essential things to know about layaway

1

At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict , this post may contain references to products from our partners. Here’s an explanation for

Flip on the TV, peruse a newspaper or check out an online site and you’ll find 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 huge 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 just as important to note when you can collect your items and what happens if something goes wrong, she says.

Thinking of trying layaway? Here are eight things you need to know.

Written by
Dana Dratch
Personal Finance Writer
Dana Dratch is a personal finance and lifestyle writer who enjoys talking all things money and credit. With a degree in English and writing, she likes asking the questions everyone would ask if they could and sharing the answers — along with smart money management tips from the experts.