10 questions to ask about layaway plans

By CreditCards.com staff

Looking to layaway?  Here are 10 questions to ask retailers that will help you find a good layaway plan -- and avoid those that should be thrown away.

1. Do you provide full or partial refunds if the layaway is not completed?

2. Do you provide store credit toward future purchases if the layaway is not completed?

3. What is the payment amount?

4. When is it due?

5. How often must the payment be made -- weekly, every other week or monthly?

6. Are any service or layaway charges added to the purchase price?

7. Are there additional charges, such as for shipping?

8. Will the layaway item be physically separated from other store merchandise, or marked "sold"?

9. If the item is not in stock and needs to be ordered, under what circumstance (such as once half the purchase price has been paid) will the order take place?

10. What are the product's details (color, size, stock number, model number, trade name or manufacturer, etc.)?

Remember, there are no federal laws that address layaway plans directly. Instead, consumers have to count on a hodgepodge of state laws and the general prohibition in the Federal Trade Commission Act against unfair and deceptive practices. If the layaway plan requires a consumer to agree in writing to make all payments until an item is paid in full, then the federal Truth in Lending Act also comes into play.

Stores may have options when it comes to outlining layaway terms: The FTC says that retailers may decide to post layaway terms on a store sign or on sales receipts, with certain businesses outlining layaways terms on both signs and sales receipts.

See related: Toys R Us joins retailers offering layaway plans

Updated: October 21, 2009

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