East Lake Neighborhood Association

Consider Layaway

According to the Federal Trade Commission (FTC), layaway purchase plans are designed for people who want to buy products and services without using credit or paying the full price immediately. Layaway purchase plans are not limited to stores-- some online merchants use them as well.

It is important to ask questions about the layaway plan and the refund policy when considering this option. Get the merchant's layaway policy in writing, and look for details on:

• The terms of the layaway plan - How much time you have to pay for the merchandise or service; when your payments are due; the minimum payment required; and possible charges for using the plan, like a service fee. Find out if there is a fee or a penalty for missed or late payments: Will your contract be cancelled? Will the merchandise be returned to inventory?
• The refund policy - If you decide you don't want the merchandise after you have made some or all of the payments, can you get a refund? Retailers' policies may differ: some give you all your money back; others may charge a non-refundable service fee; some may offer a merchant credit for the amount you paid.

Layaway plans are not specifically governed by federal law, but unfair or deceptive sales practices are illegal under the FTC Act. Check with your state attorney general, local consumer protection agency, and your local Better Business Bureau (BBB) office to find out if your state or local laws cover layaway purchases.

For this information and more, please view Layaway: Another Way to Buy.