If you’re already thinking about holiday spending and want to be a savvy shopper, you might be considering using layaway in order to stick to a budget or avoid credit card debt.
I think using layaway is a great strategy and we’ve had a number of retailers in recent years start to bring back layaway in a big way. But before you use the layaway process it’s still important that you make sure that you read the fine print for any retail deal that you enter into. It’s also smart to ask a few questions to make sure that layaway is the right choice for you.
The Better Business Bureau recently gave consumers a checklist of questions to ask when you’re buying items on layaway, in order to help you get your money’s worth and obtain the best possible terms while you’re shopping.
Here are 8 questions to ask before you commit to making a purchase on layaway:
1.    How much time do I have to pay for the item?
After you put some money down
for a layaway purchase, you typically have a range of time to pay it off. But some places may give you specific deadlines, such as 30 days, 60 days, or maybe even 90 days or longer. Whatever the case, you need to know exactly by what time/date you have to pay the merchandise off.2.    When are the payments due?
If a retailer says you have to pay weekly, monthly or you have to pay on a specific day of the month, you need to know that to make sure that you can adhere to those terms.
3.    How much do I have to put down?
Some stores may require just $5 or even a couple bucks to start a layaway transaction. Other merchants may ask for a certain percentage, based on the overall value of the merchandise you plan to buy. Find out what’s mandatory to see if it meets your budget.
4.    Are there any other fees involved?
Do inquire about fees, as various places might charge you service plan fees, storage fees or other
charges. If you’re going to use one of those third‑party websites that set up layaway plans for you online they might charge a fee for their service. So be sure that you know the additional fees you might incur in addition to paying for the goods themselves.
5.    What happens if something goes wrong?
Unexpected things happen in life, so it’s a good idea to know what would happen with your layaway purchase, or the money you’ve paid up front, if your finances change and you’re not able to meet the original terms of your layaway agreement.
Are you penalized, for example, if you miss a payment? Are there any “late fee penaltiesâ€? Do they return the item into stock or into their inventory? What exactly happens if you don’t pay as agreed? That’s important to know.
6.    Can I get a store credit?
Be sure to find out upfront if a retailer is willing to offer a store credit if you change your mind after making a few payments. You
might simply change your mind or maybe you find the same item at a much cheaper price so you decide that you don’t want the layaway goods after all. Well, do you just lose your money or will the store actually issue a refund you or at least give you a store credit? A store that won’t issue a credit could be a deal-breaker for savvy layaway shoppers.7.    What happens if the item goes on sale later?
Ask merchants whether they will discount the purchase price for you if you were buying something that was previously, say, $99 and you were going to pay, $33 a month for it. But then all of a sudden the item goes on sale for $79.
8.    Do they have a good rating from the Better Business Bureau?
It always pays to do a little homework on the companies with whom you’re doing business. In this case, before you enter into a layaway transaction, you might want to find out a retailer’s BBB rating. It tells you something about the way in which the company conducts business, the level of consumer complaints they’ve had, and so on.
Again, I like the idea of using layaway. Some people consider it sort of a throwback, kind of a relic of that old‑fashioned, good old method if saving up enough money for a purchase until you can actually pay for the whole thing in cash.
And you know what? That’s a good habit to get used to — or perhaps to get back to.
Back in the day, a lot of us used layaway as a way to budget and avoid credit card debt. And if you do it this holiday season, you’ll find that it can probably work for you as well — as long as you ask the right questions upfront.
“Ask The Money Coach†is a syndicated column written by personal finance expert Lynnette Khalfani-Cox, co-founder of the free financial advice blog, AskTheMoneyCoach.com. Follow Lynnette on Twitter at @themoneycoach.