Layaway Not Always The Way to Save
SPRINGFIELD, Mass. (WGGB) — Layaway can work for or against the shopper.
Milagros Johnson, Director of the Springfield Mayor’s Office of Consumer Information, explains some of the upsides.
“First, it forces the consumer to stick to a budget,” said Johnson. “You don’t have to pay interest. A major credit card, you’re going to most likely be paying a high interest rate, especially if its a department store.”
Then there’s the downside of layaway. Johnson says one of the biggest pitfalls people fall into is when their item goes on sale before they finish paying it off.
“If the item goes on sale or the price is significantly reduced, there are some stores that will allow you to get the sale price,” said Johnson. “Others don’t.”
Other downsides are service and cancellation fees.
Service fees are paid up front for the privilege of using layaway. They average $10, but Best Buy’s is 5% of the cost of the item and it’s nonrefundable.
Cancellation fees can go as high as $30 and are often required up front. They’re refunded if you pay the item off, and even though you’ll pay a cancellation fee if you change your mind, you will, by law, get back any layaway payments you made up to that point.
Johnson says whether layaway saves you money depends on knowing exactly what a store’s policy is.
“Look at the whole picture,” said Johnson. “Do the math. Don’t be quick to rush to the store and oi a layaway away. Do the research.”
And do it before you’re at the store to avoid making a quick decision you might regret.