The Return of Layaway: An Overview of Layaway Programs

Layaway Programs: Sears & Kmart

Want to skip the holiday crowds this year? Get your shopping done early in the year and the paying done later with layaway programs available at some of the country's biggest retailers. With layaway, you pick out your items, pay a down payment, and then make biweekly payments on the remaining balance usually for 8 to 12 weeks. Then, when the balance is gone, you simply stop in and pick up your items.

To help prep you for all of the layaway options out there, I've researched seven of the biggest retailers to find out the details on their layaway programs:

Sears/Kmart
Sears and Kmart are the kings of the layaway world, with tons of options and programs. Here are three great options they offer:

  1. Shop online? Layaway online.
    You can put a wide variety of items from either store's website on layaway, as long as it's available for pick-up at your local store. You can retrieve your items after making your last payment. If you know exactly what you want (and especially if it's something your local store might not have), you can save yourself some time.
  2. Layaway is available in most stores.
    This allows you to pick out exactly the item you want, and ensures it'll be there waiting for you at Christmas. No snow delays here!
  3. Christmas Club program.
    Sears and Kmart each offer a Christmas Club program (Kmart Christmas Club is Here), allowing you to add money to a gift card progressively over the year. If you start early, they'll add a 3% bonus to any money you put on the card, and you can use this bonus after they load it to your card on November 24. If you're planning on a Craftsman set for that special someone, this is a great option to get some free money.

With more than one layaway option available, both Sears and Kmart offer plans that cater to your budget as well as your shopping preference.

Down Payment:
You'll have to put up either $15 or a specified percentage of the item's cost, whichever is higher. Sears requires a minimum down payment of 20% and Kmart requires 10%. There's also a $5 service fee added at the time of layaway. If you decide you don't want the item anymore, you'll be refunded your payment on the item up to that point, minus $10 as a cancellation fee.

Payoff Period:
You have eight weeks to pay down the balance in four payments. Kmart does offer a 12 week option for in-store layaway on total purchases of $300 or more, but you will be faced with a $10 service fee, a $20 cancellation fee, and a 10% down-payment. Sears offers 26 or 52 week layaway plans, but only for fine jewelry. If they don't receive your payment within 7 days after the due date, your item will be put back on the shelves and you'll receive a refund minus the fees.

Limitations:
Some items are prohibited from layaway, such as doorbuster sales, gift cards, and liquor. Don't expect to be able to put Black Friday deals on layaway. See the full list here.

Price Adjustments:
If the item you picked out goes on sale within 14 days of your layaway, you can ask for a one-time price adjustment. You can't price-adjust clearance merchandise.

Kira Botkin is a contributor for the Money Crashers personal finance blog, where she discusses various financial topics like smart shopping, budgeting, frugality, saving for the future, and getting out of debt.

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November 5, 2010
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