3 On Your Side: Holiday Layaway Plans Making A Comeback
Jim Donovan reports...
PHILADELPHIA (CBS) -- The crucial holiday shopping season is right around the corner, and it will be make or break time for retailers. As 3 On Your Side Consumer Reporter Jim Donovan finds, many big chain stores are helping cash-strapped customers by reviving an old-time payment policy, the layaway plan.
Layaway programs let consumers put aside store merchandise and make payments on it until the full price has been met.
Joe Ridout of Consumer Action says, "Wal-Mart is bringing back layaway after a hiatus of about 5 years, and Sears, Toys R Us, KMart and other stores also offer layaway, largely because the economy has been so bad to so many families."
Before putting anything on layaway, read the fine print. Service fees to put something on layaway can run $5 to $10, plus many stores charge between 10-20 percent of the full price right away. Most layaway plans charge a cancellation fee of a few bucks-or a percentage of the total purchase. Also, be sure to ask if the store will honor price breaks. Some will give you at least one price adjustment if an item goes on sale.
For consumers without good credit, these policies may make a lot of sense.
"You won't run the risk of going over your head in debt and then paying, say, 30% interest on a credit card for something that you couldn't afford," Ridout explains.
Of course, it doesn't make any sense to put a down payment on something you can't afford to pay off, so think before you buy. By the way, whether you are using layaway or paying in cold hard cash, if you're wondering what items are discounted most heavily in fall, they include air conditioners, camping equipment, and lingerie.
Reported by Jim Donovan, CBS3
