Creating a layaway policy



Layaway is a certain type of deferred payment purchase type. It is known as lay-by in many other countries, such as in Australia and New Zealand. Usually, customers who purchase a product using layaway make an initial down payment, and then make regular payments until the full price of the product is paid for. They are then able to take away the product. However, there are a variety of different layaway models and processes that have been trialed and used. These often depend on the particular sector into which the product falls.



Setting up a layaway policy may be a good option for your store. It can be useful for helping to entice buyers who may not otherwise be willing to buy expensive products. For example, while many customers may balk at paying two hundred dollars for an item of clothing all at once, they may be more wiling to do so over a period of time. In addition, large purchases such as furniture or white goods can be made more attractive to customers when using a layaway style payment plan.

There is no national law governing how a layaway policy should be set up, but there are a number of things that you should first consider when setting up your store policies around layaway. Some major issues include ensuring that you meet trade and lending guidelines. There may also be state or local guidelines around layaway that you need to ensure that you meet. Failure to comply with these laws could result in costly legal action, and this is never good for your business. Bear in mind that many of these laws will work in the customer's favor rather than yours, so you should ensure that you are compliant.

In addition, when setting up your layaway process, you should ensure that you have a method for tracking your customers and for keeping records of their details. This can make it easier for you to follow up if they have missed a payment. Shoppers who miss a payment may have forgotten about their purchase altogether, or they may be having difficulty meeting the particular financial agreement of your layaway terms. It's good to keep track of this sort of thing to see whether your policy may need revising in order to keep it customer friendly.

You should also put together some sort of written documentation describing your layaway agreement. Having a documented policy can make things easier for you if a customer happens to misinterpret or misunderstand your policy. If you have a written policy relating to your layaway agreement, you can simply direct them to the terms of the policy if an argument arises. If you only have a verbal policy, or a vaguely stated policy, there is room for misinterpretation of the policy. This could be difficult for you in terms of managing your customers, and in terms of obtaining the full payment for the item in question.