To Layaway or Not to Layaway?

Remember layaway? To me – the word evokes an avocado-colored washing machine and Mom telling me to “settle down or go wait in the car.”

In today’s economy, layaway is making a comeback! Let’s hope those avocado-colored appliances never do . . .


Aquatic Dreams, a PADI 5* IDC in Modesto, used layaway to successfully boost business during their winter sale. By promoting layaway in their sale flyers, the store estimates they brought in an additional $10,000 in revenue.

“Everyone who bought large packages mentioned that the only reason they purchased those items was because of the layaway program. One fourth of our sales were put on layaway and it is amazing how many people have come in and made deposits already. Now we have payments coming in small little chunks which is helping now that sales are light. “

Here are some basic steps to a layaway program:

  1. Decide what items will be eligible for layaway (anything over $250, for example)
  2. Next, create a purchase agreement so you and the customer know what’s expected.
  3. Write up the total price including tax.
  4. Calculate the downpayment – 25% down is typical
  5. Determine the financing period: 90 days, for example.
  6. Create a time frame for payments (once every two weeks). Be sure there’s an area on the form to log payments as they come in.
  7. Decide on the penalty for an unpaid balance after 90 days (12% interest, for example).

Have the customer sign the payment plan, photocopy the completed form and give the copy to your customer. Keep the original.

Something else to consider: allowing customers to “rent their own gear.” A portion of your rental fee (say 75% ) can count towards their layaway payment.

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