Valley News Live - KVLY/KXJB - Fargo/Grand ForksSchemes & Rip Offs: Layaway Tips

The current economy has left many shoppers on a budget and searching for more affordable methods of paying for big-ticket items and holiday gifts. This holiday season, many families will be turning to alternate forms of payment to make ends meet. With many stores offering layaway services, Better Business Bureau is offering advice on how to use this payment plan in lieu of credit cards.

Once considered a dated, old-fashioned method of payment, layaway services are back in a big way, with many businesses now shaking the dust off their layaway programs for today's beleaguered consumers. Buying items on layaway is different from putting them on a credit card because the buyer isn't charged interest on the purchase and can't take the item home until it is paid off. When purchasing items on layaway, the buyer must typically make a down payment of 10 to 20 percent and pay any service or plan fees for the store to hold the item for them. The customer then has typically 30 to 90 days to make periodic payments to pay off the balance. Once it is paid off, the customer can take the items home.

"Layaway services can be a great alternative to the using a credit card," said Stephen A. Cox, president and CEO of the Council of Better Business Bureaus. "However, it's extremely important that customers take note of the fine print and know what to expect."

As a complement to in-store layaway, some stores provide online layaway services for purchasing items through the retailer's website. Additionally, third-party businesses have sprung up for the purpose of setting up layaway plans online between customers and retailers that don't already have a layaway program. Customers make periodic payments to the third-party layaway service provider. Once the item is fully paid for, the business then buys the item from the retailer and ships it to the customer.

When buying items on layaway, BBB advises consumers to get everything in writing and offers the following checklist of questions to ask:

• How much time do I have to pay off the item?

• When are the payments due?

• How much do I have to put down?

• Are there any storage or service plan fees?

• What happens if I miss a payment? Are there penalties? Does the item return to inventory?

• Can I get a refund or store credit if I no longer want the item after making a few payments?

• What happens if the item goes on sale after I've put it on layaway?

• Does the retailer or third-party layaway service have a good BBB rating?

For more advice on how to be a savvy consumer this holiday season, visit www.bbb.org/us/bbb-news.