[UPDATE: Story edited to reflect the current layaway fee of $5, down from $15 previously.]
In what is perhaps a sign of serious and continued economic distress here in the United States, Walmart, citing customer demand, will be offering its holiday layaway financing once more — even earlier this year than last year. Starting in September, customers will be able to put down payments on gifts they’d like to buy for loved ones come Christmas, rather than pay for everything afterward as has become the norm in the last few decades.
There’s no doubt that saving up for large purchases is the way to go about buying things, but layaway seems like a better option for consumers than credit cards — especially for those who have a tendency to get themselves into debt, or who have bad credit. But layaway comes with its own fees and inconveniences. So let’s take a look: is Walmart’s layaway a good deal?
The minimum total value of a layaway purchase must be at least $50 and each item included in the purchase must cost $15 or more. Toys, electronics, small appliances, jewelry and some sporting goods may be purchased this way. First a customer must pay a $5 layaway fee to Walmart, and a $10 or 10% down payment, whichever is greater. Layaway customers then have until Dec. 14 to complete their payment for their purchases, after which point, they can pick up what they’ve bought, and Walmart issues them a $5 gift card to pay back their deposit — great for stocking-stuffers, we suppose, and deviously clever on Walmart’s part.
If customers fail to pay for their layaway goods by the deadline, Walmart will refund your down payment and any payments, but it keeps the $15. That’s a reasonably good incentive to continue paying towards your goal, but not overly punitive. Failing to put money in your piggy bank or savings account, by comparison, will only lead to feelings of guilt. So while it’s mortifying to think you might give Walmart something for nothing — and who could be less deserving! — you can also think of the $15 as a carrot or stick to keep you moving in the right direction.
The other big downside to this layaway deal is that it might mean biweekly trips to Walmart, which, well there are more enjoyable places to go on payday. At the very least, you can avoid your local Walmart on Black Friday and closer to Christmas when crowds get big and sometimes, in rare instances, violent.
So is Walmart’s layaway a good deal? It certainly is for Walmart, which gets your $5 whether you manage to pay for your goods or not, and for consumers we’d have to say it’s a good deal, too. It’s better than credit card debt, and it’ll crack the whip a little harder than a savings goal you set for yourself might.
Then again, you might be able to negotiate layaway with your local mom-and-pop shops, and maybe that would be better all around?