Ok good people of America we’ve looked at how easy Layaway is to use and how you can purchase your items.

But we can put the rose coloured glasses away now just to look at what can go wrong – Remember there’s no such thing as a free lunch!

Disadvantages of Layaway

There’s little doubt layaway schemes are convenient for a great many people and affordable. But here’s another catch – they aren’t always free! Surprised?

We thought not! Some stores may actually charge you a nominal fee just to kick start the process. They might also sting you with a fee if you make a late payment or fail to pay off the goods fully.

We mentioned credit cards in article one and some stores will let you pay with a credit card – but of course this will make the item a lot more expensive suddenly, so you must weigh all of this up!

There are limits

Retailers aren’t altogether stupid and of course some goods simply won’t be available on Layaway. These will probably include computers, food and liquids. There’s also one little concern that if the store closes down due to bankruptcy, consumers may well lose their money. Though we shouldn’t think this will happen with Wal-Mart, so stick with the big names if you can!

Thoughts!

You’re probably wondering why Layaway schemes died out and you may not know they actually kept going until the 1980’s. Credit cards came thundering onto the scene and with the advent of modern technology consumers wanted to have things right now! Stores didn’t want the added costs of handling the goods and storing the merchandise. This was the advent of store branded credit cards, so the layaway system was taken away but not altogether! Credit cards will still actually quite new for many Americans at this time. Oh and E.T paid us a visit!

So what can we learn from all of this?

Layaway was put into storage by many stores in the 80’s and 90’s as the plastic became fantastic, and the 20th century entered a new era. But in 2008 the economic crisis really hit American families hard and retailers were suddenly forced to think of something new to keep their heads above water. In fact some stores began to specialise in layaway. We’ve mentioned the system can teach people budgeting skills, and even help them with their savings plans. So all of this has to be good fiscally! The fact is it teaches us all we can’t expect to take goods away unless we can afford to pay for them in full. Instant gratification can also get us into financial trouble very easily. We begin to learn the true value of things and that credit cards shouldn’t really be used to pay for goods in this way. We need to pay full attention to the fees stores can introduce and what the small print contains at the bottom of the agreement. We have to choose what we buy wisely and be sure we can meet the regular payments.

So what’s the rub?

Well the upshot is Layaway plans are financial tools that when used correctly can benefit us greatly without getting us into debt. But they need careful planning and much discipline to make them work fully! The old fashioned values can shine through and help us with our financial commitments. Layaway plans are actually quite ingenious and nothing to be ashamed of. They can be used by people from all walks of life……..God bless America! Layaway is the future!

Doesn’t this concept sound wonderful? You can get the things you need and not get yourself into trouble financially?

Whoever thought of this should be President?

But wait, just as in all the movie drama’s there’s a catch!

So what do they call this cunning plan?

The name is ‘Layaway’,

LAYAWAY – A WAY OF PURCHASING RETAIL MERCHANDISE HELPING CONSUMERS TO PUT AN ITEM ON RESERVE AND MAKE PAYMENTS ON IT!

Yes, you’ve guessed it, you can take away the goods once they are paid for in full – isn’t that complete genius?

This little baby goes all the way back in time to the great depression when shoppers had very little money to make any full purchases.

Just like fashion items the layaway system was hidden away until just a couple of years ago when the economic problems of the day began to bit as hard as Jaws!

Retailers saw this as a great marketing tool and a way to draw more customers into their stores. And guess who lead the way? No it wasn’t Al Gore again, but ‘Wal-Mart’. It was also a winning strategy as the system soon began to catch on again.

OK smart A……….but did customers benefit from this?

Well we know what you’re thinking? Is this just a new way of boosting bottom lines or do people really score big time? To be honest, there’s a line meeting in the middle of this so both parties still come out smiling. But of course some people might see this as demeaning and some may look upon it as a gift from heaven. And yet any way of helping people to buy things they can’t afford in one go has to be a great idea right? Well yes, but let’s take a look at all of this in closer detail and you can make your own mind up?

What are the benefits of using Layaway?

So we’ve already established Layaway assists shoppers in buying goods even if they don’t have the full amount of money available initially. It works like this. Consumers will be asked to pay a small deposit and then the item is held by the store for a fixed period of time. This time period is completely at the discretion of the retailer buy will usually be no more than 60 days or two months. You’ll find this will probably be extended during peak holidays or busy shopping seasons like Christmas.

In real terms this system presents an opportunity to people of ensuring they can lay their hands on the latest gifts, knowing they’ll be there for them further down the line to take home. This can be a wonderful way of planning ahead and staying organised. Once the store has put your item on Layaway the purchaser will need to make regular payments toward the total cost of the item until they reach the required full amount. But there’s one truly great thing about this scheme?

PUT YOUR CREDIT CARD AWAY AS UNLIKE CREDIT CARDS LAWAWAY PROGRAMMES DO NOT CHARGE INTEREST. MORE IMPORTANTLY YOU CAN FORGET ABOUT ANY CREDIT SCORE WORRIES AS THEY SIMPLY DON’T MATTER!

So there you have it – a simply system to help you whenever you feel the need whereby both retailers and consumers come together in perfect harmony! Cue for a song……..right?

Wrong…….but many experts believe this is a terrific way of getting people to work to personal budgets. You’re actually paying for an item over time so you need to be disciplined and methodical or quite simply – you won’t get the item at all!

So in part 2 and you must read this because we take a look at the downside of the system. We look at lessons we can all learn from this and sum up whether the system really does work.