Layaway is a popular spending strategy for the holidays. It allows you to pay for products over time, but they stay at the store until paid for. There are pros and cons of layaway programs regardless of which store’s program you use. Only you can determine if they will fit into your current financial situation.
I have used the same Christmas layaway program for my household and for family that live in other parts of Canada since 2003. I’ll tell you a little more about it below and why I continue to use this particular program. (This is not an affiliate pitch, I just really, truly find value in the program).
First, lets look at:
8 Pros and Cons of Layaway You Need to Know
1) Pro – No ‘Credit Card Hangover’
When you purchase on layaway you are paying cash. These cash payments are smaller and over time, rather than one large chunk at the time of purchase. These chunks are paid off before you get your goods, leaving you with no balance.
2) Con – Fees and Interest
Most stores require an up front fee and a down payment. This fee you pay to begin your layaway contract may or may not be refunded. Also, some stores may charge a storage, cancellation, restocking or finance fee.
3) Pro – You can have your shopping done early
Being able to choose your items before the holiday shopping season can almost guarantee that you will end up with the hot toy or the wanted brand. These will be set aside and waiting for you. You also have the bonus of not having gifts sitting around and being ‘accidentally’ found by the snoopy sort.
4) Con – You will be making several trips to the store as it gets busier
You may have your gifts chosen, but you will still need to make regular trips to the store as the holiday gets closer. You will still need to stand in line to make your payments, along with all the other folks who are standing in line to make their payments. One thing about standing in the payment line, that is also an isle stocked with impulse buy products. If you are not careful, you may end up buying more than you budgeted for.
5) Pro – On-line Layaway
Some retailers offer the ability to use their layaway program for online purchases. This helps to avoid the hassles of dealing with holiday crowds at the tills to make your regular payments.
6) Con – Strict payment terms
Some stores require a weekly, bi-weekly or monthly schedule to be strictly followed. Some have a looser payment policy but need to be paid by a specific date. If you miss a payment or the due date, your chosen items can go back into stock, often with a cancellation or restocking fee. Though usually what you have paid for your items to date, minus any fees will be refunded.
7) Pro – No credit or income checks are needed
Most stores simply require proof of age of majority and a down payment or fee. Even folks with a bad credit history can qualify.
8) Con – Only certain types of items, or a specific dollar value may qualify for layaway
Some stores may only allow certain types of items, like electronics, furniture or jewelry to be put up on layaway. Other stores may have a dollar amount minimum or maximum or limit the number of items.
5 Questions to Ask Before Using a Layaway Program
Using a stores layaway plan may be a good option if you want to spread out the payments for a few items over time. Before putting anything on layaway, read the agreement carefully and ask yourself a few questions:
1) How much time do you have to pay off your items?
2) What are the penalties for missing a payment?
3) Can you get a refund if you change your mind?
4) If the item goes on sale after you have put it on layaway, can you request the lower price?
5) What fees are mandatory to using the program?
The Layaway Plan I have used for Years – Chrisco Canada
Before I begin, I do NOT receive a commission for this. They do have a dealer program, but it requires the person contacting them to give a dealer number (which I don’t have) and they do not have an on-line affiliate program that I know of.
If you have any questions, I will be happy to share my experience with you. Just drop me a line through my Contact Page.
I have used this service since 2003 and will continue to use it. Here’s 4 reasons why:
1) I have my Christmas menu, appetizers, snacks and beverages for our family and guests planned out and paid for by the end of August
Chrisco Canada is a program that allows you to choose food baskets and spread out the payments over months. The final payment usually falls at the end of October. I like to have my payments done by the end of August. Then I put the same monthly payment amount away using the envelope system to save for Christmas gifts.
2) There are usually items in the food baskets our family doesn’t like
This is an unusual reason to purchase something, but hear me out. The items in the food baskets can’t be modified out side of the advertised choices and by knowing ahead of time what we will be setting aside for the Food Bank, I know what we will need to pick up for additional Food Bank donations and budget for them.
3) Top Up Baskets
With the purchase of our family basket, we qualify for the special Top Up Baskets. These are smaller food baskets at a lower cost. I like to send these as family gifts to those who live in other parts of Canada and I can budget and pay for them throughout the year.
4) Delivery Right To the Door
The cost of the food baskets are a little more than what you would pay if you went shopping for everything listed when you find it on sale. But the delivery to the door service makes it worth it to me.
It also means that the Top Up Baskets are being delivered to my family members through out Canada, with out me having to pay further postage and special handling fees. I also don’t have to worry about finding specialized packaging for the frozen goods and worrying about how best to ship them.
There is also non-food basket layaway available, but I haven’t used it yet. Mum bought herself a new vacuum cleaner on this program and said it was a great experience.
You can check them out at www.santaschoice.ca
Have you used a store layaway program? How was your experience? Let me know in the comments.
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Please Note: I am not a licensed professional. The information in this article is for reference and entertainment purposes only. If this article has inspired you to try something new, please speak to a licenced professional or financial councilor first. They are Your finances. In the end, only You can make decisions for your specific financial situation.