Amazon Layaway: a new advantage of Amazon Prime


If you’re old enough to have parents who bought items on layaway (or did it yourself), you’ll understand Amazon’s latest perk for Amazon Prime: Amazon Layaway.

It is available now, mainly intended for back to school shopping, but many generally remember that the layaway was a staple of department store vacations in the decades following World War II. The idea was – and is – this: you reserve big purchases like Christmas toys for the kids well before the big day, and pay the store’s layaway service a portion of the final tab every few weeks until the item is paid for and ready to be picked up, packed and delivered to eager children or other recipients.

Amazon Layaway works, virtually, the same way. Curiously, this is the reverse of the very popular (and much riskier) buy now, pay later programs. Here you pay now, get later.

Amazon says it has thousands of select items ready for Amazon Layaway, and there are no credit checks, no interest charged, and there are no cancellation fees. Items are clearly marked with a button that says “Reserve with Layaway”. Layaway customers pay 20% of the total cost of the item at initial payment. The article is then reserved and the price is blocked.

The next steps are to make equal payments every two weeks for up to eight weeks until the item or items are paid for in full. Faster payment means faster delivery. Not all items sold by Amazon are available for layaway. Amazon advises if you want items to arrive in time for the December holiday so you can shop by October 23.

But is setting aside a good way to save money?

Unlike buying with a credit card, layaway programs generally do not charge interest – although some stores previously charged a small “layaway fee” to store items – and are not considered a form of debt (therefore, no need for a Check credit).

Amazon doesn’t charge any fees above item costs, but if other retailers are resurrecting layaway, ask yourself if they charge layaway fees (a decade ago Best Buy charged 5% of the total layaway price and retailers including Burlington Coat Factory, Marshalls and TJ Maxx charged a non-refundable $5 layaway fee).

Other concerns include:

  • Using layaway can cost you dearly. If you lock in a product’s price and set it aside, you’ll miss out if and when the item goes on sale for a lower price, perhaps on Black Friday or during the busy holiday shopping season. Amazon confirms its prices are locked at the time of purchase and this is the final price of layaway items, even if the product is on sale. But, in these times of inflation, there is also the advantage of having locked in a given price which could go up too.
  • You might pay more to cancel. Amazon Layaway does not charge cancellation fees. Other retailers have done this in years past and may do so again if they relaunch the layaway.
  • You may not be able to afford this layaway. At first glance, laying aside seems like a more prudent option – and it’s certainly better than buying something – or several things – that ends up putting you in debt. And yet, the idea of ​​taking an expensive item and breaking it down into more manageable payment installments can end up obscuring the total cost. In short, can you really afford it? And if you face cancellation fees, that’s bad money on top of bad money.
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