In the mid-2000s, more mainstream retail stores began offering layaway again as financial belts continued to tighten for the average consumer. Most antique shops and malls still offer layaway, and you’ll find more and more online sellers of antiques and collectibles defining layaway terms as well.
What is a Layaway?
A layaway is an agreement between a buyer and a seller allowing payment of an item to be broken down into several monthly payments. The purchaser agrees to pay a stated number of payments in a given time period, usually with a down payment and one or more subsequent payments, while the seller holds the object until it is paid off. Layaway agreements are usually defined in writing and signed by the buyer so there are no misunderstandings about policies regarding payment terms, due dates, layaway service charges, and the consequences of not paying the layaway off in a timely manner.
What is the Advantage of Layaway?
Layaway provides a way to add to collections or buy decorative objects for a home without putting a strain on a buyer’s budget and/or turning to high interest credit cards to afford those items. It is also an affordable way for people who do not use credit cards to buy on a payment plan.
While some antique sellers will charge a small, non-refundable service charge just to establish a layaway, many don’t. This equates to a free payment plan for a set period of time as agreed upon by the buyer and seller.
Are There Drawbacks to Buying on Layaway?
While layaway is indeed a very convenient way to afford items you may not otherwise be able to purchase, there are some issues to consider to be sure it’s the right plan for you.
Shady Sellers - With antiques and collectibles, the most notable drawback is that if a business goes under before you complete the layaway transaction you could lose your money. If you’re placing a layaway at an antique store or through an online shop that has been in business for many years and has a good reputation in the trade, this isn’t likely to happen. Just make sure you’re comfortable with the seller before setting up a layaway.
Losing Down Payment Because of Hardship - Another downside to layaway is that most agreements between a buyer and seller have the purchaser forfeit all monies paid if they cannot complete the transaction. This means that if you have made two payments out of four and you have a circumstance that prevents you from paying off the layaway, you will lose your money.
In instances of extreme hardship some dealers will work with you to either extend the layaway or offer a partial refund. But after you’ve tied up merchandise they could have sold to someone else for a couple of months, you do have to understand if they adhere to the original layaway policy you agreed to initially.
No Discounts on Layaways - Another thing to consider is that many antiques dealers will not discount layaway items. Generally, they look at it as offering one courtesy or another to customers: layaway or a discount. Since the shop owner will be waiting anywhere from a month to several months to get all their money, they often don’t feel they can afford to discount on layaway items.
Enabling Shopaholics - One of the biggest concerns financially is that layaway enables consumers to purchase things, luxury goods as an example, they probably shouldn’t be buying in the first place given their income and budget. Some dealers believe this so wholeheartedly they don’t even offer layaway. They feel like if you can’t buy an item outright or afford to pay for it immediately with a credit card, that you don’t need to buy whatever it is you’re considering in their shop.
What if a Seller Doesn’t Advertise Layaway Terms?
If a seller doesn’t advertise layaway, it never hurts to ask about it anyway. Most sellers of antiques and collectibles have a good bit of money tied up in an item so layaway isn’t ideal. They need to make cash flow a priority so they can replenish their inventory when items sell.
On the other hand, a sale is a sale. They might decide it’s better to agree to a layaway than miss out on moving an item, especially if it’s something they’ve had in stock for a while. This can be true even for small items sold at antique shows. Sometimes show sellers will agree to hold an item for you with a down payment that day, and then ship it or arrange for delivery once you pay the layaway off.