The low-down on layaway

There’s still time to plan ahead for holiday gifts while beating the last minute shopping stress. To avoid the usual budget crunch this December, why not give layaway a try?

Here’s how it works. You can reserve the items you plan to buy by putting down a small deposit and service fee of $5 to $10. You then make payments in installments. Once paid in full, the items can be picked up at the store.

Think of it as a budgeted payment plan over the course of a few weeks or up to 3 months, depending on the store, without being charged any interest fees. Generally, layaway is restricted to in-store items that are not on clearance.

While figuring out if layaway is for you, the Better Business Bureau advises consumers to understand exactly what’s involved. For example, how much time do you have to pay it off, when are payments due, and what happens if you miss a payment, change your mind or the layaway item goes on sale? Would you get a refund, store credit or is the money lost?

Sears and Kmart have a reputation for their generous layaway programs both stores are filing for bankruptcy. What does that mean for any items on layaway? If the store closes, do you get your money back?

Why would anyone chose layaway instead of just charging the items to a credit card? For those who lack the self-discipline to pay off credit card balances, it’s a smarter decision for your budget in the long run. Because you can’t pick up the item until it’s paid off, you won’t owe money long after the holidays are over. Without those extra credit card payments, you can open a savings account early and get started saving for next year.

Still interested in layaway? Here are a few stores to choose from.

Walmart: Layaway plans run through Dec. 10 and are for in-store purchases only. To be eligible for layaway, each item must cost $10 or more and the total purchase amount must be $50 or more. The down payment is $10 or 10%, whichever is greater, and regular payments can be made at any register in the store where your items are being reserved. Walmart also makes it easy to sign up for payment reminders by email or text.

Gamestop: You can spread those payments for your favorite gamer’s gifts over a few weeks. A minimum $25 deposit is required to start your layaway contract, but it’s fully refundable and there are no fees or penalties. Trade-ins can even be used as part of your deposit or payment.

Burlington Coat Factory/Baby Depot: There’s a $5 service fee and 20% deposit required. If you make your final payment by Dec. 24 you get a $5 promotional card. If you change your mind, there is a $10 cancellation fee and refunds will be in the form of a gift card.

Marshalls/ TJ Maxx: To save you some time, check the store locator first to find out which stores offer layaway. Look for a hanger icon for participating TJMaxx stores and layaway as a Marshalls store feature. Marshalls layaway items are only held for 30 days with a minimum payment of $10 or 10%, whichever is greater, plus a $5 non-refundable fee. You also have 30 days to pay in full at select TJMaxx stores but the minimum is $15 or 10%, whichever is greater. Nolayaway is available for jewelry, items that have been marked down, food items and furniture.