Has there ever been a day when you really wanted to purchase something but just didn’t have enough money in your pocket to do it? If so, one option available is called layaway. Layaway purchase plans are designed for people that want to purchase merchandise, but cannot pay in full immediately. Many different kinds of layaway plans are offered in places such as discount department stores, or specialty stores selling appliances, jewelry or clothing.

“How do layaway plans work?” The answer is quite simple. Layaway plans requrie that you make installment payments on the merchandise. You receive it only after you pay the full price. This plan is different than credit because when you buy on credit, you take the merchandise before you pay. Each store establishes the terms for their layaway plan. Most layaway plans involve making a deposit (usually a percentage of the purchase price), and paying the balance over a period of time until you have paid for the item in full. In return, the store retailer will hold your product until it is paid for.

Unfortunately, there are some problems you can experience if your understanding of the layaway plan is not up to speed. According to the Center For Debt Management, there are some key ways to avoid layaway problems.

• To avoid any misunderstanding, make sure to get specific information about a store’s layaway terms before you participate in its layaway program.
• Before ever signing a layaway agreement, make sure you have a copy of a clear “written disclosure” that explains how the plan works. This would include the schedule of payments, the refund and exchange policies, an explanation statement that your goods will either be set aside for you or that they will remain in the store, as well as any late fee policies.
• If any of the store’s conditions are not acceptable to you, you may want to shop elsewhere for merchandise that can be put on layaway.

Don’t forget that until you finish paying for the layaway item, the store retailer has your money and the merchandise. If the store goes bankrupt or out of business while you are still paying, there is a chance that the money you paid and your merchandise may be lost. According to the Center for Debt Management, the most logical way to avoid this is to check the store’s reputation with your local Better Business Bureau before you buy the merchandise on layaway. If it is your first time shopping in that store, you might start out by purchasing an inexpensive item on layaway, just check how responsible and loyal the store is. To avoid any confusion about how much money you have already paid, keep clear and accurate records of the payments you make; your records may come in handy later if you have any disputes with the store.

“Is there a law that specifically governs layaway plans?” The answer is no, however the Federal Trade Commission Act makes unfair or deceptive sales illegal. There also may be state laws that can protect your layaway purchases. To find out about any state or local laws that can protect your layaway purchases, check with your local Better Business Bureau or Consumer Protection Division of the Attorney General’s office.