With the holiday season starting next month, taking the layaway route to purchase expensive items may be more convenient, and prudent, for those on a budget, according to a spokeswoman for the local Better Business Bureau.
Dottie Callina said the current economy has forced many families to use layaway services to make expensive purchases. This is an alternative to using credit cards, she said.
Consumers can use a layaway service to make partial payments without being charged interest, she explained. Buyers take the item home once it is paid off.
"Layaway services can be a great alternative to [using] a credit card," stressed Fred Elsberry, Jr., president and CEO of the local BBB. "However, it's extremely important that customers take note of the fine print and know what to expect."
Callina added that a down payment of 10 to 20 percent is typically made when using layaway. Service or plan fees to keep the item until it's paid off are also common. The customer usually has 30 to 90 days to pay the product's total balance, she said.
"As a complement to in-store layaway, some stores provide layaway services for purchasing items through the retailer's web site," said Callina.
Third-party businesses have popped up to provide online layaway plans for retailers that don't, themselves, have a layaway program, she added.
The third-party layaway provider accepts periodic payments from consumers, until the item is paid off, she said. The provider will then purchase the item from the retailer and send it to the consumer.
"When buying items on layaway, BBB advises consumers to get everything in writing," said Callina.
She said the questions to ask before making a layaway purchase are:
• When should the item be paid off?
• When are the payments due?
• How much is the down payment?
• Are there storage or service-plan fees involved?
• What happens if a payment is missed? Are there penalties? Is the item returned to inventory?
• Is a refund or store credit given to consumers who don't want the item anymore?
• What happens if the item goes on sale after it's placed on layaway?
• Does the retailer or third-party layaway service have a good rating with the BBB?
For more information on being a smart consumer this holiday season, visit the BBB web site –– www.bbb.org/us/bbb-news.