5 Tips to Make the Most of Retailer Layaway Programs this Holiday Season

Money, News

The holiday season brings with it colder weather, steep discounts, a variety of seasonal lattes, and the retail sales push. You’ll also find layaway options.

Layaway might be one of your better choices this holiday season. If you’re considering maxing out your credit cards for a little holiday cheer, you might want to think again. According to a recent survey by Avvo, credit card debt is the leading cause of bankruptcy.

The survey also found:

  • Thirty-two percent of people surveyed cited credit card debt as the reason they filed for bankruptcy, followed by home foreclosure (13 percent) and job loss (12 percent)
  • The majority of consumers in the survey (64 percent) filed for Chapter 7 Bankruptcy, which is the most common form of bankruptcy filed in the U.S. Consumers
  • They also cited the impact on their credit rating (20 percent) and overall uncertainty about the outcome (20 percent) as their principal concern with filing for Chapter 7 Bankruptcy

It’s easy to fall prey to the lure of the holiday season. Some have even considered paying cash for their items. Layaway is a perfect way to get your holiday shopping done without the fear of rising credit card debt.

Let’s look at five of the top retailers offering layaway this year, and how you can make the most of it legally.


Known for its great discounts, Walmart’s layaway program is a popular choice. There’s no fee to set it up and it’s backed by match-ad (in case you find your item for a lesser price elsewhere). Your down payment is $10 or 10 percent of the purchase, whichever is greater, and is available in stores until Dec. 13. If you decide to cancel, or can’t make a payment, your payments will be refunded minus a $10 cancellation fee.


If you’re looking for more options when it comes to layaway, Kmart might be a good place to start. The store not only offers in-store layaway but also online layaway. The contracts are for eight weeks, and for purchases of $300 and up, a 12-week option is available in-store. New layaway plans made before Nov. 23 are eligible for free layaway with no service fee. There are no cancellation fees in Ohio. Except where prohibited by law, an eight-week contract requires a $5 Service Fee and a 12-week layaway contract requires a $10 Service Fee. You also have a seven-day grace period if you miss a scheduled payment.

Best Buy

Known for providing one of the widest selections in electronics and home entertainment, Best Buy’s layaway provides the service for items $250 or more. The layaway period can be from eight to 12 weeks, and is available only during the holiday season. You pay 25 percent of the purchase and a non-refundable fee of five percent.

Toys ‘R Us

You’ll find a lot here. Toys ‘R Us is touting its free layaway program with a pick-up by Dec. 15. You must put down at least 10 percent of the total price of the order, plus a $5 service fee taken when you set up your layaway. Your first payment of at least 20 percent of the purchase price must be made within 15 days of your layaway’s commencement date, otherwise, you will forfeit your items and they will be returned to the shelves. In Maryland, the service fee is limited to $1 for goods $500 or less, and $5 for goods over $500. Additionally, in Maryland, if the price of the item you order is reduced within ten (10) days of your order, you are entitled to a credit for the difference in price. There’s a $10 cancellation fee for the service.


Sears offers layaway for purchases of $400 or more. You’ll sign an eight-week contract requiring a $5 service fee, or a 12-week layaway contract requiring a $10 Service Fee.  According to the fine print, no partial cancellations are permitted. Also, if you’re looking to cancel, it will have to be processed where you originally set up the layaway. If you miss a payment, you have a seven-day grace period after your payment due date before your contract is cancelled and the items are returned to stock; a nonrefundable cancellation fee will apply.

With Black Friday looming, it’s temping to be lured by all the hype. However, if you’re looking for other alternatives, layaway might be the best choice for you.

Do you think layaway programs are a good idea? Have you ever been burned by a retailer’s layaway program? Tell us here: https://apps.facebook.com/my-polls/layaway