layaway

Layaway is a purchase arrangement in which a buyer selects merchandise, pays a deposit, and the retailer holds the item until the total price is paid in full. The buyer typically cannot take possession or have the item delivered until the final payment, and ownership generally transfers only after completion of payment. Layaway does not involve traditional credit or interest charges, unlike financing.

In a typical layaway plan, the buyer makes a down payment (often 10–20%) and scheduled installments over a period of weeks or months. If all payments are made by the agreed date, the retailer releases the item to the buyer. If the buyer cancels, refunds depend on the policy and may involve nonrefundable deposits or cancellation fees; some programs allow credit toward future purchases. Certain items or sale periods may be excluded from layaway.

Regional usage varies. The arrangement is common in the United States; in the United Kingdom and some Commonwealth countries it is called lay-by or lay-by purchase, and in Australia the term lay-by has historically been used. In recent years, many retailers have emphasized credit-based options such as buy now, pay later, which serve a similar budgeting purpose but operate under different terms.

Advantages include budgeting control and the avoidance of interest charges, while disadvantages include funds being tied up, potential fees or nonrefundable deposits, and the risk of losing the item if deadlines are not met. Layaway is often used for durable goods and during holiday seasons when buyers want to secure items without taking on debt.

Consumers should review contract terms, including hold period, cancellation and refund rules, fees, and item eligibility, and verify whether taxes are included. Laws and practices governing layaway vary by jurisdiction and retailer.