Comparison of Layway Plans from 5 Major Retailers

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Photo: Irargerch

Is layaway smart? According to Senator Charles Schumer (NY) layaway programs are deceptive and misleading. Senator Schumer is prepared to take on layaway programs with the same force that he used to take on the credit card companies. Schumer is the one who put the legislation in place that now requires credit card companies to provide consumers with upfront terms and conditions in the form of what’s called the Schumer Box.

Those that support layaway say that it’s a better option than using credit cards. There is no interest for putting items on layaway, and they help you avoid going deeper into debt.

There is, however, a cost to using layaway services. Virtually all such programs charge a service fee that consumers must pay, along with a down payment. Typically, service fees range from about $5 to $10 dollars and the down payment is a percentage of your order total (typically about 10%). In addition, there is a fee if you cancel the layaway contract.

Layaway isn’t a new concept. I remember my mom putting large purchases and Christmas gifts on layaway. Back then, fewer people carried credit cards, so layaway was the only option if you didn’t have the cash. I had thought layaway programs were a thing of the past. But some major retailers like WalMart and Toys R Us have brought back layaway for the holidays. And other stores like TJ Maxx and KMart always offer layaway to their customers.

So I put together a list of 5 popular retail stores to compare their layaway programs. For each store you’ll find answers to three key questions: (1) how much does it cost, (2) how big of a down payment must you make, and (3) how much does it cost to cancel.

TJ Maxx Layaway Plan

Not all TJ Maxx (and Marshal’s) stores offer layaway, but for those that do they allow you to put your items on layaway for up to 30 days. The minimum payment they require is $10 or 10% of the purchase – whichever is greater. They will hold your items for a 30 day period and you can pay on your items at the store – there is no set payment schedule. If you decide to cancel your layaway there is a $5 cancellation fee and you will be refunded for the total amount you paid towards your purchase (minus the $5 fee). There are some items that can’t be placed on layaway like furniture, jewelry, and food.
If you cancel – $10
If you don’t cancel – $5 + items

KMart Layaway Plan

KMart’s layaway program is unique because you can shop online or in the stores. All the fees are based on which payment plan you choose – the 8 week or 12 week payment plan. Your layaway item(s) will require a down payment of $10 or 15% for the 8 week plan or $30 or 15% for the 12 week plan. The service fee for the 8 week plan is $5 and the fee for the 12 week plan is $10. In order to be eligible for the 12 week plan your purchase has to be $300 or more. You make your payment online or in the store every two weeks. If you cancel your layaway you will receive a refund of your payments minus the service fee ($5 or $10) and cancellation fee ($10). The KMart layaway program can be used on items in the following categories: Clothing, Electronics, Toys, Appliances, Jewelry, Home, Lawn and Garden, Outdoor Living, and Bedding.
If you cancel – $10 or $20 (based on plan)
If you don’t cancel – $10 or $20 (based on plan) + items

WalMart Layaway Plan

WalMart allows you to put electronics and toys on layaway during the holidays (Oct. 17 – Dec. 16). Their program is pretty straightforward. There is a $5 service fee with a 10% down payment. Your purchase must be $50 or more with each item being at least $15. If you cancel your layaway you will be charged a $10 fee and you won’t be refunded the $5 service fee. Layaway is only available for in store purchases and layaway is not offered on Black Friday.
If you cancel – $15
If you don’t cancel – $5 + items

Toys R Us Layaway Plan

Toys R Us offers different types of in store layaway plans: All Toy Layaway, Large Toy Layaway, Electronics Layaway, and Juvenile Layaway. All layaway works the same and you are required to make a deposit of at least 20% of the total price of your order along with the a $5 service fee. If your items requires shipping charges, they are due at the time of layaway. You may make payments at any time, but 50% of the total price of your order must be paid within 45 days and the total price of your order must be paid within three months. If it’s during the holidays, then there is a “Holiday Cutoff” time in effect. If you decide to cancel your layaway you will be charged a $10 Cancellation Fee.
If you cancel – $15
If you don’t cancel – $5 + items

Sears Layaway Plan

Sears also offers layaway for online purchases and store purchase. They offer both an 8 week plan and a 12 week plan. Your layaway item(s) will require a down payment of $20 or 20% for the 8 week plan and $35 or 20% for the 12 week plan. There is a service fee and it is determined by the payment plan you choose. The service fee for the 8 week plan is $5 and the fee for the 12 week plan is $10. In order to be eligible for the 12 week plan your purchase has to be $400 or more and is only available for in store purchases. You make your payment online or in the store every two weeks. If you cancel your layaway you will receive a refund of your payments minus the Service ($5 or $10) and Cancellation fees of $15.
If you cancel – $10 or $20 (based on plan)
If you don’t cancel – $5 or $10 + items

Here’s a side-by-side comparison chart of the 5 layaway programs:

Store
Service Fee
Down Payment
Length of Layaway
Payment Schedule
Cancellation Fee
TJ Maxx/ Marshal's$5 (non-refundable)$10 or 10% (plus service fee)30 DaysWhenever you want$5
KMart$5 or $10 (non-refundable)$10 or 10% - $15 or 10% (includes service fee)8 or 12 weeksBi-Weekly$5 or $10
WalMart$5 (non-refundable)10% (plus service fee)Oct. 17 – Dec. 16Whenever you want$10
Toys R Us$5 (non-refundable)20% (plus service fee)3 months (50% must be paid within 45 days)Whenever you want$10
Sears$15$20 or 20% - $35 or 20% (includes service fee)8 weeks or 12 weeksBi-Weekly$15 (plus non-refundable service fee)

Published or Updated: December 16, 2011
About Rob Berger

Rob founded the Dough Roller in 2007. A litigation attorney in the securities industry, he lives in Northern Virginia with his wife, their two teenagers, and the family mascot, a shih tzu named Sophie.

Comments

  1. I don’t particularly like layaway plans. They lock people into making purchases as a designated store instead of shopping around to find the best deal. It turns the focus from a good deal to a good layaway plan. The best way to save money for gifts is to budget the entire year and shop year-round as you see good deals. Don’t wait for the holidays!

  2. jim says:

    I’m not clear what the benefit of a layaway plan is.

    You don’t get the item sooner and you have to pay the full amount for it. I’m not sure why this would be better.

    I guess it acts like a forced savings program. ??

  3. Sam says:

    The benefit to layaway is that when you find a good deal, but can’t afford it right then and there, you can put the item(s) on layaway and pay over a period of time. You still get the good price and you can pay with cash. Some stores offer layaway without charging a fee. However, you should be sure about your purchase or expect to pay a cancellation fee if you change your mind.

    • Rob says:

      Sam, the people I’ve talked to that use layaway say exactly what you’ve described. They find a good deal, but don’t have the case. so layaway let’s them lock in the savings.

    • jim says:

      Yeah, ok I can see it makes sense from that perspective. I wasn’t thinking of that.

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