Ask Andy: Layaway Plans

(WMC-TV) - Many of the big box retailers are re-introducing layaway to their holiday sales policies. They'll let shoppers hold items at the stores and make payments without interest in time to bring those items home for the big day.

I generally like layaway. It keeps consumers from piling up interest on their credit cards and gets them paying cash.

However, layaway plans come with five conditions:

* PERCENTAGE DEPOSIT. Layaway plans typically require a deposit -- 10 percent or more of the cost of the item. That deposit can be refundable or non-refundable.

* SERVICE FEES. These also can be refundable or non-refundable.

* MINIMUM PURCHASES. Layaway plans often require a minimum purchase amount. A typical layaway minimum is the item must cost at least $50.

* LIMITED PRODUCTS. Layaway is often restricted to specific categories of items, like toys or electronics. Furniture stores sometimes offer layaway.

* PAYMENT DEADLINES. You can't get away with paying on the item forever. You must have the item paid off by a deadline set by the retailer.

If you don't meet that deadline, the retailer can withdraw the item, refund all or part of what you have already paid or hit you with a layaway cancellation fee.

Layaway is good option as long as you understand the conditions.

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