Layaway is a purchasing agreement by which a retailer agrees to hold the merchandise, by securing it with a deposit until the price is paid in full by the customer. Customers can do the layaway payment in installments as a part of the layaway plan. But unlike the installment plan, the customer receives the product only after the full payment. When compared to other payment plans, especially the credit card, layaway stands out with its no-interest feature. Even if the customer decides to discontinue the plan they can easily cancel and get a refund for the paid amount after a deduction of a cancellation fee. The cancellation fee depends on the layaway plan. Let us know about the ‘Walmart Layaway Program’.
The American multinational retail corporation of a chain of hypermarkets, department stores, and grocery stores- Walmart- also offers a seasonal layaway program. Any day between August 28 and December 14, except the day of Thanksgiving, customers can choose any products like electronics, toys, furniture, appliances, sports goods, etc., and add them to the layaway plan. It is available in Walmart and Walmart supercentre stores. Without any interest, customers can pay for the product before December 14 and purchase the products.
Walmart Layaway Program
Around Christmas, the festival season is a time of bulk purchases and huge expenses. Buying presents and festival supplies can cost a lot at a time. Walmart aims at this single huge payment at the time of the year-end and offers their layaway program between August 28 and December 14. Customers would get almost 4 months to pay the amount which otherwise they have to pay altogether in December. But in some locations and also for jewelry Walmart offers year-round layaway.
Account Opening
To take part in the layaway program, or to open a layaway account, one has to visit the store because Walmart doesn’t offer layaway for online purchases and only for in-store purchases. There would be a designated layaway counter at every store and customers, after selecting their products, can approach the counter. Customers above the age of 18 can open a layaway account by filling out a form. There won’t be any application fee or account opening fee for Walmart layaway. Customers can sign in for Email or text reminders regarding the payment and pickup.
Layaway Payment
After opening an account in the layaway program, the customer has to make a down payment of either $10 or 10% of the basket, whichever is higher. Each product included in this program should cost a minimum of $10 and the basket altogether should be worth a minimum of $50. You can pay the rest of the amount within the last day of the program, that is within December 14, at any counter in the store not only at the layaway counter. But any Walmart outlet won’t accept the layaway payment. Customers have to visit the same store at which they had opened the account.
Pick-up and Cancellation
Customers have to pick up the product after completing the payment within the last day of the layaway offer, from the same store of purchase. Both the customer and an alternative pickup customer, whose above the age of 18, can collect the purchased items. Otherwise, the account cancellation and the product would go back to the inventory. In both cases of automatic cancellation and intentional cancellation of the layaway account, the payment made would be refunded to the customer by deducting a Cancellation fee of $10.
But at some locations such as Maryland, Ohio, Rhode Island, and Washington DC, there is no cancellation fee. But in the Walmart stores in Alabama, it’s $25 and it’s $50 in North Carolina. When it comes to returning, Walmart’s return policy is also applicable for products purchased through layaway.
Pros and cons
The layaway program has many cons as much as pros, for both the customer and the seller. When Compared to a credit card or a loan facility with interests, layaway is a profitable mode of payment for the customer. Walmart doesn’t charge any interest for the time the product is put on hold. Layaway is also applicable for items in Rollback, clearance, and special buy. In that case, discounts that would only be for a short period can be put in the layaway program and can lock the discount.
One can even modify the layaway basket by both adding and removing items from the basket. While adding products, the total basket cost should stay within the down payment of $10 or 10%. Otherwise, an additional payment would be required. Similarly while removing products from the basket, the total basket cost shouldn’t be less than $50. If it is more than the required amount, it would be refunded.
In most cases, many customers even after signing in for the layaway program fail to follow up, where the products would go back to the inventory. Because of this, the retailer has to face the loss. Since it’s a seasonal offer most products would be seasonal and when it had a demand the seller couldn’t sell it since it was held up for the layaway customer. When the product came back after the season there won’t be any demand and the retailer has to face the loss.
Conclusion
Layaway programs are a better way to manage the family budget, especially during festival seasons. It could help to spread out the expenditure and divide it between different months, and that too without any interest. But for the seller, layaway is not as good as it is for the customers. The lack of assurance in confirming the selling of the product may leave the seller with an outdated product. This gets worse if most of the customers refuse to follow up on the program and the lower cancellation fee is not much help. It’s because of these factors, since 2021, Walmart decided to discontinue its layaway program and replace it with the “Affirm”. It’s a buy now, pay later program even with an interest rate of 10% – 30%.
