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Layaway

Definition

Layaway is an agreement in which the seller reserves an item for a consumer until the consumer completes all the payments necessary to pay for that item.

What does 'Layaway' mean

Layaway is a purchasing method that allows a consumer to put a product on hold by placing a deposit on the item. Layaway allows the customer to make smaller payments on the product until the purchase price is paid in full, rather than paying for the item with credit and adding interest to the cost. A layaway plan ensures that the chosen merchandise will be in stock and ready for pick-up when the final payment is made.

Explaining 'Layaway'

This method works for consumers who have a limited amount of disposable income and are unable to make larger purchases all at once. It also works to retailers' advantage by allowing them to offer products to lower-income customers. Layaway can also be used as a savings plan; because the customer has already made a commitment to purchase the product on layaway, he or she can not give in to temptation to spend the money elsewhere.


Further Reading


Optimal inventory decisions when offering layaway
www.tandfonline.com [PDF]
… A layaway programme allows lower budget consumers who have sufficiently high valuations to pay … In terms of the product categories served, layaways are often associated with the purchase of … Studying the range of financial services for low and moderate income families in the …

Optimal inventory decisions for a risk-averse retailer when offering layawayOptimal inventory decisions for a risk-averse retailer when offering layaway
www.sciencedirect.com [PDF]
… A layaway programme allows lower budget consumers who have sufficiently high valuations to pay … In terms of the product categories served, layaways are often associated with the purchase of … Studying the range of financial services for low and moderate income families in the …

The mobile phone as the tool to redefine savings for the poor: evidence from KenyaThe mobile phone as the tool to redefine savings for the poor: evidence from Kenya
www.tandfonline.com [PDF]
… A layaway programme allows lower budget consumers who have sufficiently high valuations to pay … In terms of the product categories served, layaways are often associated with the purchase of … Studying the range of financial services for low and moderate income families in the …

The economic crisis, capitalism and Islam: The making of a new economic order?The economic crisis, capitalism and Islam: The making of a new economic order?
www.tandfonline.com [PDF]
… A layaway programme allows lower budget consumers who have sufficiently high valuations to pay … In terms of the product categories served, layaways are often associated with the purchase of … Studying the range of financial services for low and moderate income families in the …

Expert Available To Discuss Return Of Layaway ProgramsExpert Available To Discuss Return Of Layaway Programs
scholars.unh.edu [PDF]
… A layaway programme allows lower budget consumers who have sufficiently high valuations to pay … In terms of the product categories served, layaways are often associated with the purchase of … Studying the range of financial services for low and moderate income families in the …

Are low-income Canadians financially literate? Placing financial literacy in the context of personal and structural constraintsAre low-income Canadians financially literate? Placing financial literacy in the context of personal and structural constraints
journals.sagepub.com [PDF]
… A layaway programme allows lower budget consumers who have sufficiently high valuations to pay … In terms of the product categories served, layaways are often associated with the purchase of … Studying the range of financial services for low and moderate income families in the …

An economic analysis of the consumer bankruptcy crisisAn economic analysis of the consumer bankruptcy crisis
heinonline.org [PDF]
… A layaway programme allows lower budget consumers who have sufficiently high valuations to pay … In terms of the product categories served, layaways are often associated with the purchase of … Studying the range of financial services for low and moderate income families in the …



FAQ


What is layaway?

Layaway refers to a payment plan in which the consumer makes payments towards the purchase of an item over time.

How does layaway work?

The consumer deposits money into an account and then pays for the item over time. If they pay off the balance, they get their deposit back plus any interest earned on it. If they don&8217;t pay off the balance, they lose their deposit.

Why are layaway plans so popular?

Layaway plans are immensely popular because consumers can buy items without paying interest or getting into debt with credit cards or loans.

Who offers layaway plans?

Walmart and Kmart offer these plans heavily advertised on TV. Consumer advocates also like them because people can manage major purchases while sticking to budgets and not going into debt with credit cards or loans.

Do you think that poor people should be allowed to lend big corporations money by buying things on layaway?

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