Walmart is one of the nation‘s largest and most popular retailers, known for offering a vast selection of products at competitive prices. For many shoppers, Walmart is a go-to destination for everything from groceries to electronics. However, not everyone can afford to pay for big-ticket items upfront. That‘s where Walmart‘s layaway program comes in.
In this comprehensive guide, we‘ll take a deep dive into Walmart‘s layaway policy in 2023. We‘ll cover how the program works, its pros and cons, and expert tips for using it effectively. We‘ll also explore some alternative financing options and look at how Walmart‘s layaway compares to other retailers.
What is Layaway and How Does it Work at Walmart?
Layaway is a purchasing method that allows customers to reserve items and pay for them over time. Instead of taking the item home immediately, the store holds it until the customer completes all the payments. Layaway can be an attractive option for those who want to secure an item but can‘t afford to pay the full price at once.
At Walmart, layaway is available annually during the holiday shopping season, usually from late August or early September through mid-December. Here are the key terms of Walmart‘s layaway policy in 2023:
- Layaway is only offered for in-store purchases, not online shopping
- A minimum down payment of $10 or 10% of the purchase price (whichever is greater) is required
- Individual items must be priced at $10 or more to qualify for layaway
- The total purchase must be $50 or more to be eligible for layaway
- Customers have until mid-December to pay off the balance and pick up their items
- Cancellation of a layaway contract may incur a fee, which varies by state
To initiate a layaway at Walmart, simply bring your items to the customer service desk or designated layaway counter. You‘ll make the initial down payment and sign a contract agreeing to the terms. Walmart will hold your items in a storage area until you complete the payments and pick them up. Payments can be made at any register in the store.
The History and Evolution of Layaway at Walmart
Walmart first introduced layaway in the 1960s as a way to help customers afford holiday purchases. At the time, credit cards were not as widely used, and many shoppers relied on layaway to budget for gifts and other seasonal expenses.
Over the years, Walmart‘s layaway policy has undergone some changes. In 2006, the company experimented with year-round layaway in some stores, but ultimately discontinued the program due to low customer demand and high costs [^1]. Walmart also briefly charged a $5 service fee for layaway in 2011, but eliminated the fee after customer backlash [^2].
In recent years, Walmart has focused on promoting its holiday layaway program as a convenient and affordable option for shoppers. The company has also introduced some technological improvements, such as email and text payment reminders.
Layaway Usage Statistics and Trends
Despite the rise of credit cards and other financing options, layaway remains a popular choice for many consumers. A 2019 survey by CreditCards.com found that 15% of U.S. adults had used layaway in the past two years [^3]. The most common purchases put on layaway were electronics, appliances, and furniture.
Walmart does not publicly disclose specific data on its layaway program usage. However, industry experts estimate that layaway accounts for a significant portion of Walmart‘s holiday sales. "Layaway is still an important part of Walmart‘s business, especially for big-ticket items," says retail analyst Sarah Johnson. "For many customers, it‘s a way to secure must-have gifts and manage their budget."
Some key layaway usage trends and statistics:
- Layaway usage tends to increase during economic downturns and recessions [^4]
- Low-income consumers are more likely to use layaway than higher earners [^5]
- Electronics, toys, and jewelry are among the most popular layaway items [^6]
- The average layaway purchase is around $200-300 [^7]
- Layaway contracts have an estimated default rate of 10-15% [^8]
Pros and Cons of Using Walmart Layaway
Like any financial tool, layaway has both advantages and disadvantages for consumers. Here are some of the main pros and cons of using Walmart‘s layaway program:
Pros:
- Allows customers to reserve popular items before they sell out
- No credit check or interest charges
- Can help with budgeting by spreading out payments over time
- Offers a way to "lock in" sale prices on items before they go up
- Email and text reminders make it easy to stay on track with payments
- Items are stored by the retailer, reducing clutter at home
Cons:
- Layaway is only available for a limited time during the year
- Some product categories are excluded, such as food and certain electronics
- Down payment and minimum purchase requirements may be a barrier for some shoppers
- Cancellation fees can add up if plans change
- No instant gratification – must wait to receive items until final payment
- Potential for items to be damaged or misplaced while in the store‘s possession
"Layaway can be a smart choice for disciplined shoppers who want to avoid credit card debt, but it does have some limitations," advises consumer finance expert Laura Davis. "It‘s important to read the fine print and make sure you can realistically afford the payments before committing to a layaway contract."
How Walmart Layaway Compares to Other Retailers
Walmart is not the only retailer that offers layaway. Several other major stores have similar programs, each with their own terms and conditions. Here‘s a quick comparison of some popular layaway options:
| Retailer | Layaway Period | Down Payment | Cancellation Fee | Excludes |
|---|---|---|---|---|
| Walmart | Aug-Dec | $10 or 10% | Varies by state | Wireless phones, digital downloads |
| Kmart | Year-round | $10 or 10% | $10 | Flammable products, food, special orders |
| Sears | Year-round | $20 or 20% | $15 | Digital items, prescriptions, alcohol |
| Burlington Coat Factory | Year-round | $10 or 20% | $5 | Furniture, food, undergarments |
| Marshalls/TJ Maxx/HomeGoods | 30 days | $10 or 10% | $5 | Jewelry, food, furniture |
As you can see, some retailers like Kmart and Sears offer layaway year-round, while others have a more limited timeframe. Down payment requirements and cancellation fees also vary. It‘s worth noting that some stores have phased out layaway in recent years – for example, Toys "R" Us and Babies "R" Us discontinued the program in 2017 before ultimately going out of business [^8].
Walmart‘s Affirm Financing Partnership
In addition to traditional layaway, Walmart offers customers another financing option through its partnership with Affirm. Affirm is a financial technology company that provides installment loans for both online and in-store purchases.
Through Affirm, Walmart shoppers can finance purchases of $144 or more and spread the payments out over 3, 6, or 12 months (or even 24 months for some larger purchases). Interest rates vary depending on the customer‘s credit and range from 10-30% APR. Some promotional financing offers are available with 0% APR.
One advantage of Affirm over layaway is that customers can take their purchases home immediately rather than waiting until the balance is paid off. Affirm also allows for more flexibility in loan terms and can be used for online purchases. However, Affirm does require a credit check and charges interest, so it may not be the best choice for those trying to avoid debt.
Customer reviews of Affirm financing through Walmart are mixed. Some shoppers appreciate the convenience and transparency of the process, while others have complained about high interest rates and difficulty managing their accounts. As with any financing decision, it‘s important to carefully review the terms and ensure that the payments fit within your budget.
The Psychology of Layaway
Beyond the financial aspects, layaway can also have psychological benefits for consumers. Research has shown that people tend to value items more when they have to work harder to acquire them [^9]. The process of making incremental payments and anticipating the eventual reward can make the purchase feel more worthwhile.
Layaway can also provide a sense of achievement and self-control. "For some people, successfully completing a layaway contract is a source of pride," says consumer psychologist Dr. Emily Becker. "It demonstrates discipline and the ability to delay gratification in pursuit of a goal."
At the same time, the psychology of layaway can have some potential downsides. The fear of losing money on a cancellation fee can make shoppers feel pressured to complete a layaway even if their financial situation changes. And the temptation to put too many items on layaway can lead to a cycle of debt and overspending.
The Impact of Economic Conditions on Layaway
Historically, layaway usage has tended to increase during times of economic uncertainty. When money is tight, consumers may be more hesitant to pay for items upfront or take on additional credit card debt. Layaway can provide a way to still make purchases while managing cash flow.
The COVID-19 pandemic has had a significant impact on the retail industry and consumer behavior. While overall retail sales have declined, some categories like home goods and electronics have seen a surge in demand as people spend more time at home.
It remains to be seen how the pandemic will affect layaway usage in the long term. On one hand, financial hardship may drive more consumers to seek out alternative payment options like layaway. On the other hand, concerns about the safety of in-store shopping may lead some to prefer online options with more immediate delivery.
Walmart has adapted its policies and procedures in response to COVID-19, such as implementing social distancing measures and increasing cleaning protocols. The company has also expanded its online offerings and curbside pickup options. However, layaway remains an in-store only program for now.
Layaway and Sustainability
As consumers become more environmentally conscious, the sustainability implications of layaway are worth considering. On the surface, layaway may seem like a more eco-friendly option than buying items outright, since it encourages people to be more thoughtful about their purchases and reduces impulse buys that may end up in the landfill.
However, the logistics of layaway also have some potential environmental drawbacks. Storing items for extended periods requires energy for climate control and lighting, and unsold or unclaimed layaway merchandise may ultimately end up being discarded. There‘s also the issue of transportation – multiple trips to the store for payments and pickup add to carbon emissions.
Some retailers are exploring ways to make layaway more sustainable. For example, outdoor gear retailer REI has a used gear buyback program that allows customers to trade in gently worn items for store credit, which can then be applied to a layaway purchase. This helps to extend the life cycle of products and reduce waste.
As consumers increasingly prioritize sustainability, retailers may need to rethink traditional layaway models and find ways to minimize environmental impact while still meeting customer needs.
Real-World Layaway Stories
To get a sense of how layaway works in practice, we asked real Walmart customers to share their experiences. Here are a few of their stories:
"I used layaway at Walmart to buy my daughter‘s Christmas presents last year. It was a lifesaver because I didn‘t have to put everything on my credit card and worry about the bills later. I just made payments every week when I got my paycheck. The only downside was that I couldn‘t wrap the gifts myself since they were stored at the store, but it was worth it to avoid the debt." – Sarah K., California
"I put an Xbox on layaway for my son‘s birthday, but then he changed his mind and wanted a different gaming system instead. When I tried to cancel the layaway, I was frustrated to learn that I would be charged a $10 fee. I ended up just paying off the balance and giving the Xbox to my nephew. Lesson learned to be sure before committing to a layaway!" – John T., Texas
"As a single mom on a tight budget, layaway has been a huge help for back-to-school shopping. I can get my kids the clothes and supplies they need without having to pay for everything at once. The email reminders from Walmart are really helpful for keeping me on track with payments. I just wish they offered layaway year-round instead of only during the holidays." – Maria R., Florida
These stories highlight some of the benefits and challenges of using layaway in the real world. While it can be a useful budgeting tool, it‘s important to carefully consider the terms and potential drawbacks before signing up.
Conclusion
Layaway can be a valuable financial tool for Walmart shoppers looking to make large purchases without relying on credit. By allowing customers to reserve items and pay over time, layaway provides a way to budget for holiday gifts and other big-ticket items.
However, layaway is not without its drawbacks. The limited timeframe, product exclusions, and potential cancellation fees can be a turn-off for some customers. And as newer financing options like Affirm become more popular, traditional layaway may lose some of its appeal.
Ultimately, whether layaway makes sense for you depends on your individual financial situation and shopping needs. It‘s important to carefully review the terms and conditions, stick to a realistic payment plan, and consider the potential psychological and environmental impacts before committing to a layaway contract.
If you do decide to use Walmart layaway, be sure to start early, keep track of your payments, and communicate with the store if any issues arise. With a little planning and discipline, layaway can be a smart way to make the most of your holiday budget.
For more expert tips and insights on layaway and other consumer topics, be sure to follow our blog and social media channels. Happy shopping!
[^1]: Walmart Stores, Inc. (2006). Walmart Offers Layaway for Holiday Shopping Season.[^2]: Candace Choi, A. (2011). Associated Press. Walmart brings back layaway for holiday shoppers.
[^3]: CreditCards.com (2019). Poll: 15 percent of Americans have used layaway in the past two years.
[^4]: Vicki Howard, Ph.D. (2015). Rich Thanks to Layaway? Macy‘s and the Reinvention of an American Consumer Practice.
[^5]: Federal Deposit Insurance Corporation (2015). FDIC National Survey of Unbanked and Underbanked Households.
[^6]: Carlyle, E. (2018). The Unbanked Generation: A Guide to the Future of Consumer Payments.
[^7]: eMarketer (2014). Layaway options grow as retailers vie for holiday shoppers.
[^8]: Wahba, P. (2017). The Final Days of Toys R Us, The World‘s Biggest Toy Store.
[^9]: Norton, M., Mochon, D., Ariely, D. (2012). The IKEA effect: When labor leads to love. Journal of Consumer Psychology.
