With the advent of online layaway plans, the Better Business Bureau (BBB) Serving Mississippi urges consumers to be cautious when agreeing to buy anything on a layaway plan.
There are currently two types of layaway plans:
- Traditional layaway plans allow consumers to buy merchandise by making regular installment payments to retailers and then receiving the merchandise only when full payment is made.
- Contemporary layaway plans involve a layaway company to act as middleman between the consumer and the retailer. These companies collect payments from consumers for retailers and then have purchased items delivered upon full payment.
“Online layaway services have the same basic structure, although they may actually operate differently,” said Bill Moak, President/CEO of the Mississippi BBB. “Nowadays, you can pay for anything from furniture to vacations to planned surgery with a layaway program.”
Here is how online layaways are structured:
- Online retailers post items for sale and consumers make their selections.
- Online layaway firms allow consumers to set up a payment plan to cover the cost of the purchase.
- Consumers make agreed upon payments to the layaway firms.
- Upon payment in full, the layaway company sends the money to the retailer and has the retailer ship purchased items directly to consumers.
BBB tips to consider before agreeing to a layaway plan:
- Understand the terms of the plan. Know about time allowed to make payments, minimum payment requirements, any service fees and penalties for late or missed payments.
- Review the cancellation options. Is any refund available (full or partial)? Are there cancellation fees? How are refunds paid?
- Reputation of the business. Online companies can be more difficult to evaluate than real-life ones. Check them out with the BBB online at www.ms.bbb.org or by calling the 24 Hour Automated Response Line (800-987-8280).