Is layaway a good way to pay for holiday purchases? After my Monday post, Walmart brings back holiday layaway, I started to question my nay stance because everyone that commented was in favor of layaway programs. I've never used layaway, and honestly I don't see the merits of using a program that ties up my money, especially if there is a fee associated with getting my money back should I need it.
With Walmart's holiday layaway program, customers can pay for their holiday shopping over a 90-day period for a $15 open fee. If the layaway is completely paid off, the customer receives that $15 back via a Walmart gift card. If the layaway is canceled, the $15 fee is forfeited.
Now, I understand that $15 doesn't sound like a lot of money, but it is a fee that doesn't need to be paid. If you want to pay for your holiday shopping over time without paying an open fee, simply create a list of items, determine how much money you need to save and start saving.
However, a few MNN readers were of the opposite mindset, voting yay on the layaway question.
Shawn said, "I will absolutely use the layaway. The stores get crazy after Thanksgiving, and the selection of items that you may want to give as gifts are basically picked over. If you find what you want and put it in layaway, you know that you have what you need without having to frantically run around to find items. You're not out the $15 if you don't cancel. I think it's a great plan."
If you don't cancel, though, you're technically out the $15 cash. Sure, you get a Walmart gift card worth $15 but Walmart is forcing you to spend an additional $15 in its stores for the luxury of using their layaway program. While some may argue that they'd spend $15 in the store anyhow, this takes the control of my money out of my hands and frankly, I like to control my own money.
Peggy commented "It sounds good to save money at home over pay periods, but don't forget, the items you want for your family may be all sold out if you wait."
I can honestly say that I've never run into a sold-out item during my 11 years of holiday shopping as a mom. If I know that a gift is going to be a hot-selling item then I make sure that I prioritize the purchase of that gift. If for some reason an item does sell out, then I think that it makes a great learning opportunity for my children. The Rolling Stones' song "You Can't Always Get What You Want" comes to mind.
Since all of the comments on my blog post were in support of layaway, I did what any good blogger would do — I turned to my Facebook page for more input and perhaps a contrary point of view. The first person to respond to my query was Brian. His thoughts on layaway differed from the opinions of both Peggy and Shawn. "Layaway is an example of exactly what's wrong in this country. If you don't NEED it and can't AFFORD it, don't buy it ... now or later."
Brian provided the only anti-layaway response, though, and while the majority of responses I've read were pro-layaway, I'm still not convinced that layaway is a good financial decision.
A response from Michelle included a point that I agreed with: "Layaway is way more financially responsible than credit cards." With layaway, you are working with a fixed payment period and can't postpone paying off your balance for years while continuing to pay the credit card company monthly finance charges."
Jessie agreed with Michelle: "While I have never personally done a layaway program myself I can see how that would be a financially responsible way to 'save' for items rather then to give in to impulse and swipe a charge card and take the item right away and pay for it later. I think layaway actually helps people to have self control and curb impulse shopping since it gives a tangible goal and a certain level of responsibility to keep coming in and making payments on that thing until you can have it."
Interestingly enough, my husband disagreed with me. "I don't see layaway as different from reserving an item in stock at a fixed price. I consider it a better option than the Rent-A-Center type transaction or a credit transaction. Less complicated than a credit purchase and has no credit requirements, and puts the responsibility on the consumer to pay before getting an item. I don't see the problem."
My personal vote on the layaway question is still a nay, but I understand how it may be viewed as an attractive payment option, especially during the holiday season. What do you think? Layaway: Yay or nay?
Related personal finance stories on MNN:
- 7 things you can make instead of buying them [Photo gallery]
- 20 unique ways to save money [Photo gallery]
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