The Importance of Understanding a Merchant’s Layaway Policy


The Importance of Understanding a Merchant’s Layaway Policy


Staten Island’s only community-based business bank advises doing your research before agreeing to the terms of a purchase


STATEN ISLAND, N.Y. – If you don’t want to pay with plastic and you don’t have the necessary cash on hand, you may want to ask a merchant about a layaway plan. Layaway purchase plans are designed for people who want to buy products and services without using credit or paying the full price immediately.

When you buy an item on credit, you take the merchandise home with you. When you use layaway, you typically put down a deposit — usually a percentage of the purchase price — and pay over time; the retailer holds the merchandise for you in reserve. You take the merchandise only when you have paid for the item in full.

The Federal Trade Commission (FTC) says it’s important to ask questions about how particular layaway plans work. Doing a little research on the front end can help you avoid problems later.

Get the merchant’s layaway policy in writing.

Look for details on:

    • The terms of the layaway plan: how much time you have to pay for the merchandise or service; when your payments are due; the minimum payment required; and possible charges for using the plan, like a service fee. Find out if there is a fee or a penalty for missed or late payments: Will your contract be cancelled? Will the merchandise be returned to inventory?
    • The refund policy: If you decide you don’t want the merchandise after you’ve made some or all the payments, can you get a refund? Retailers’ policies may differ: some give you all your money back; others may charge a non-refundable service fee; still others may offer a merchant credit for the amount you paid.


Check out the business. Contact your state Attorney General’s Office, local consumer protection agency, and your local Better Business Bureau. They can tell you if consumers have filed complaints against the retailer or online service.

Keep good records of the payments you make on layaway merchandise. They may come in handy if you have a problem with the seller.



About Victory State Bank:

VSB Bancorp, Inc. (OTC: VSBN) is the one-bank holding company for Victory State Bank. As Staten Island, N.Y.’s only community-based commercial bank, Victory State Bank operates five full-service locations on the Island: The main office in the community of Great Kills, and branches in the communities of West Brighton, St. George, Dongan Hills and Rosebank. For additional information, Victory State Bank may be reached at 718-979-1100 or visited online

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