Layaway facts for kids

Layaway is a shopping plan where a store holds an item for you. You make payments over time, and once you've paid the full price, you get to take the item home. In countries like Australia, New Zealand, and South Africa, this plan is often called lay-by.

What is Layaway?

With layaway, you don't take the item home right away. Instead, the store keeps it safe for you while you make payments. This is different from other payment plans where you take the item home and then pay for it later. Sometimes, there's a small fee because the store needs to store the item for you.

How Does Layaway Work?

Layaway is a good choice for people who might not have a strong payment history or don't want to use credit cards. Since the store keeps the item until it's fully paid for, there's little risk for the seller. If you decide not to complete the purchase, the item goes back on the shelf. You might get all your money back, some of it back (minus a fee), or sometimes none at all.

Why Choose Layaway?

One of the best things about layaway is that you don't pay any extra interest. The price you agree on is the final price. Also, the item is set aside for you, so you don't have to worry about it selling out. If you're buying a gift, layaway can help keep it a secret until you're ready to give it. It can also help you stick to a budget. However, if the store goes out of business before you pick up your item, you could lose your money.

A Look Back: Layaway's History

Layaway became very popular during the Great Depression in the 1930s. This was a time when many people didn't have much money. It helped them buy things they needed over time.

Layaway Today

By the 1980s, layaway became less common because credit cards were used everywhere. Stores like Walmart even stopped offering it. But in 2011, Walmart brought layaway back in the United States. This was because of new money problems and it became harder for people to get credit. Many stores now offer layaway, especially around the Christmas holidays. Some stores, like Kmart, have offered layaway for over forty years! Other big stores that offer it include Burlington Coat Factory, Marshalls, Sears, and T.J. Maxx. In Canada, you can find layaway at many local shops, like bike stores and jewelers.

Different Kinds of Layaway

Layaway isn't just for regular stores you can visit. You can also use it online!

Online Layaway

Online layaway lets you buy items by making payments from your bank account. It makes things easier for both the store and the customer. The items stay at a storage center until you've paid for them, so stores don't need extra space in their shops. Online layaway is a great way to budget and avoid debt. It can also help you reserve popular items that are hard to find. You can use online layaway for many things, from computers to concert tickets and even vacations!

Giving Back with Layaway

During the holiday season, some people like to make special donations. They pay off the remaining balance on someone else's layaway items. This allows the person to pick up their purchased items for free, which is a wonderful surprise!

There's also a payment plan similar to layaway called "guaranteed consumer funding." It lets people buy things with payments even if they don't have a perfect payment history.