Layaway makes a comeback

The online layaway

Transactions through eLayaway in October were up 1,400% from October 2007, Bilello said. The company partners with more than 1,000 retailers to offer layaway option.

Customers pay a 1.9% transaction fee and agree to a schedule of payments to be deducted from their bank accounts. Once the last payment is made, the item is shipped. There is a $25 fee for canceling a purchase.

"We have people who open their day planner and shop for the entire year," Bilello said. "There's a social awakening that we're wary of credit cards, and what they're doing to people with the 30% APR. There's a smarter way to plan and pay. . . . You may have to wait three months, but you won't have items repossessed or go to a payday lender."

Another online service, Lay-Away.com, offers a selection of goods from its own site.

What you should know about layaway

Sound good? Ask these questions before you put something on layaway:

• What service fee or layaway charge will I pay?

• Is there a cancellation fee if I don't complete the layaway?

• Will I receive a full refund if I cancel the layaway?

• What form will any refund take -- cash or store credit?

• What is my payment amount, and when are payments due?

• What happens if I miss a payment?

• Will I pay shipping charges or anything else additional?

• Could the store substitute another item for my layaway purchase and, if so, under what circumstances?

Where to find layaway

Only a few national retailers offer layaway, and their policies differ. Here's a rundown:

Burlington Coat Factory

• A down payment of 25% and a $5 service fee are required.

• If 30 days pass without a payment, you pay a $5 cancellation fee, and the merchandise returns to shelves. You receive your balance as a store credit.

eLayaway

• Items must be purchased through eLayaway or on selected retailers' Web sites.

• You pay a 1.9% transaction fee.

• Payment schedules run from three to 13 months, within merchants' constraints.

• Payments are automatically deducted from your bank account.

• If you cancel or fail to complete a layaway, you pay a $25 fee.

Kmart

• A down payment of 10% and a $5 service fee are required.

• You must make payments every two weeks for eight weeks.

• If you miss a payment by more than seven days, you pay a $10 restocking fee and receive a refund in whatever form (cash or credit) you paid.

Lay-Away.com

• Items are purchased through the Lay-Away.com site.

• A down payment of one-sixth of the purchase price is required.

• There is a six-payment maximum.

• Payments are made through online checks from your bank account.

• If you go 45 days without a payment, you pay a $35 restocking fee, and money you've paid is refunded to your bank account.

Sears

• A down payment of 20% or $15, whichever is greater, and a $5 service fee are required.

• Most merchandise must be fully paid by Dec. 23, under a holiday expansion of the layaway program to all registers in the store. Jewelry can be put on layaway year-round.

• If you fail to complete payment, you pay a $10 cancellation fee.

Marshalls and T.J. Maxx

• A down payment of 10% and a service fee, typically $5, are required.

• Payment must be completed, and items taken home, within 30 days.

• Layaway is offered in select stores only; call your local store to see whether it's available.

Published Nov. 12, 2008

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