Posted in Marketing and Strategy Terms, Total Reads: 457
Definition: Layaway Plan
When a sellers reserves an item for the customer to compete all the necessary payment before receiving the item. It is different from debt, because the customer cannot take the item before completing the payment formalities.
Usually it falls under the promotion scheme of the retail sales, whereas the customer cannot buy at present, reserves the item by depositing a fraction of the cost of the merchandise. A certain delivery date is fixed until which the store holds the product for the customer. It can help the shoppers to shop during recession times as they had little money to make the full payments.
Benefits of Layaway
For the Seller: they can utilize the Holiday shopping season, as many people will be interested for such a scheme
For the Buyer: It helps them purchase an item even if they don’t have the full payment by putting just a small deposit. Lower-income customers usually are unable to make larger purchases. Thus it can be used as a savings plan. More over the purchasing although has some minimal charges still its free of Interest .It saves time, as buyers don’t need to go searching for it in other stores, as they can easily pre book it and be guaranteed that it will remain with them during the holiday season. Unlike credit card, it doesn’t need a well-defined age or salary statement, thus can easily be availed by anyone.
Disadvantage of Layaway
Nominal fee is charged as item are put on layaway, and even buyers are charge if they misses a payment, thus it is not always for the best interest of the buyers.
Sometimes even the stores charge up to 10% down payment, which can vary by store for big ticket items.
Even the payments dates can be very rigid .For example payments in every 1 weeks. Thus it will be hectic to go to the store every week.
Even all items are not covered under this scheme in the same store.
For example: Walmart offers Layaway in store for higher-end departments.
Service Fee: $5
Cancellation Fee: $10
Payments: Payment dates vary by agreement. All purchases must be paid in full by a predetermined date in December. You must make in-store payments.
Down Payment: 10% of your purchase price.
Eligible Items: Anything from the toys, jewellery, or electronics departments. Each item must cost at least $15, and your total purchases must equal at least $50.