by Kate Flaxx

Created on: November 20, 2010

There are many stores especially department stores like K-mart, Target and Big W that offer the option of layaways to their customers. In Australia, layaways (called lay-by) are very popular with consumers and are available at a wide range of smaller businesses as well as the larger ones. Putting items on layaway or lay-by give the customer the option to leave the items in the store / shop until they’ve paid for them.  After they pay off the lay-by balance, they can then collect their items fully paid for.

A consumer in Australia can put almost anything on layaway; Items as large as fridges and washing machines all the way down to smaller items such as toys or craft objects like crayons or marker pens. 

In Australia, it usually cost 10% of the cost of the items to make a deposit on a layaway and the period of time given to pay off the balance usually around 8 weeks. This method of paying for good is very popular especially around June or July when larger stores have their toy sales and allow customers a period of 5 months to pay the balance of their layaways. The period of time given to pay a layaway is different from business to business and some have a strict rule about making periodic payments in order to keep the layaway in store for the consumer. Some stores / shops will send out reminder letters and such but others will cancel the layaway. 

Some stores that allow layaway will generate a payment schedule to let you know what you should pay per week or fortnight. This is excellent for the budget conscious consumer.  It makes it easy to apply those payments to an already set up budget and makes the goal of paying off the layaway achievable over a period of time.

A person who follows a budget can still obtain the items they want only it takes a little waiting time to actually get those items. This is similar to the traditional way of saving up money to gain what you want as opposed to using credit except with layaway, you’re paying as you go. Putting items on layaway means you won’t get your items instantly but you’ll still get them in time. 

For a budget conscious consumer, putting items on layaway is a great way to balance money over several weekly or fortnightly payments rather than use a credit card to instantly have the items. The fee (usually around $1-$3 in Australia) to establish a layaway purchase far outweighs the cost of credit card fees that can be applied to credit card purchases.

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