holiday.shopping

First Fidelity Bank offers layaway tips for Arizona residents

With the economy on the upswing for the first holiday season in years, national and local retailers alike are promoting layaway plans to help Arizona families buy something special for their loved ones without breaking the bank.

“A layaway contract with a reputable retailer can be a great money-saving tool for the budget-conscious holiday shopper,” said Kevin Sellers, executive vice president with First Fidelity Bank in Arizona. “The important thing is to do your homework and make sure you’re being smart with your money. That way, the process of preparing for the gift-giving season can be fun and rewarding for everyone.”

Layaway refers to an agreement between a retailer and a customer where the customer makes payments on an installment plan until the product is paid for in full. The method’s historical roots are in the Great Depression, when credit was largely unavailable even for the most hardworking Americans.

Today, retailers are bringing layaway back in an effort to reach out to budget-conscious consumers, according to the Better Business Bureau. Sometimes, layaway is placed on credit and debit cards by people who want to stay out of debt over the holidays by keeping their monthly payments low, avoiding the sticker shock of seeing the entire price of an item show on a single monthly statement. Other times, it is used by buyers who do not have credit cards.

Identifying a safe and cost-effective layaway arrangement can be difficult. First Fidelity Bank is offering the following tips for shoppers considering layaway this holiday season:

Know the terms. Each retailer offering layaway has a different plan, and even then the terms can vary based on the type of the product being purchased. Before committing to layaway, know what payment amounts are, when they are due, the exact product you will receive upon completion of payment and other relevant details. Ensure that the terms are locked over the life of the contract.

Know who you’re doing business with. Although national retailers are promoting layaway in a big way this year, local and regional retailers sometimes offer the service, too. Make sure that the company with which you enter a layaway contract is reputable. The Bureau of Consumer Protection makes available the federal guidelines governing layaway contracts in their online business center, accessible at www.business.ftc.gov.

Keep records. Ask for a printed invoice of the entire payment schedule upon entering a layaway contract, and request a receipt each time you make a payment. This will avoid any confusion when the time comes to pick up your product.

Discuss the cancellation policy. Over the course of the weeks leading up to the holidays, sometimes it becomes clear that the “perfect” gift for your loved one won’t be so perfect after all. Make sure you know what happens if you back out of your contract. Reputable companies will usually offer a full rebate or store credit for the amount you have paid so far, but check for any unexpected fees.

Watch out for fees. Sometimes, companies will include fees in addition to the stated payment installments, often as storage fees for keeping the product on the shelf instead of making it available to buyers willing to pay for it on the spot. Know what these fees are and what the final total of your payment will be, and make sure that total is an economically sound alternative to buying the product through another avenue.