With holiday season on the rise, sometimes retailers can find themselves in a slump: consumers prefer less expensive purchases over the more costly ones. In order to clinch good sales before the season ends, most retailers have to revert back to the concept of layaway plans.

What is a Layaway Plan?

A Layaway Plan is a scheme that allows consumers to set aside an item and pay for it over a fixed period of time. Here, they don’t pay the total sum on the spot; they pay in small sections without paying interest.

The plan itself have some fees involved, which may or may not include the following:

• Service Fee – to cover the store’s cost of processing multiple payments and keeping items reserved
• Cancellation Fee – charged if the consumer steps out of your layaway plan, or if they fail to make all payments by the due date
• Restocking Fee – charged if consumer fails to make payments on time, or don’t finish paying for your products by the due date

This sounds like a pretty great deal for consumers, but retailers have to think twice before employing this tactic. Much like a coin with two sides, layaway plans also have both pros and cons to its scheme – and you should know them all before you take your pick:

The Bright Side

Convenient: Even with the holiday season thriving, some people can’t come up with all the funds at once. They’d much rather pay in smaller sections, so that they don’t feel financially burdened. Giving consumers this extent of flexibility is highly convenient for them – and well-appreciated, too.

Easy Acceptance: Where processes like credit card checks can be time-consuming, opting for a layaway program eliminates the need for such hectic routines. All they need is a proof of identity, and evidence that the consumer is of legal age.

No Credit Complexities: Layaway programs offer consumers a safety net by having none of the complications of credit cards. This is especially useful for customers who don’t have a credit card. Even if someone cannot make the payment on time, their credit report won’t be bearing the brunt. Furthermore, they won’t be burdened by interest, either.

The Dark Side

Layaway Fees: Additional charges like service fees or restocking fees can be unreasonably high for smaller purchases. Since they cannot be changed, sometimes consumers end up paying a lot more than what they bargained for.

Strict Payment Procedures: The plan itself tends to have strict rules the consumers have to follow: due dates, fixed times, and repercussions. Though these are necessary, they can sometimes be troublesome. For example, in sudden instances, a consumer may be unable to complete the payments, for which they will have to pay an extra cancellation or restocking fee.

Not Applicable For Every Product: It is up to the retailer to decide which product should be allowed for a layaway plan, meaning the consumer has a restricted range of choice from the get-go. For people who want specific products, this stands as an obstacle.

The Final Verdict

Get this: as a retailer, the verdict is up to you!

Layaway plans are great to manage payments and generate sales for your more expensive products; you can allow your customers a certain degree of flexibility to buy something they love without resorting to the hassles of credit. However, it’s fine print must not be overlooked.

Since this plan is technical, it must be handled technically as well. A standard disclosure must be shown to customers considering a layaway program, which they have to approve and sign before stepping in. This way, all relevant information and policies are brought to your customers’ notice, without any threat of disputes.

But if you feel like the cons completely trump the pros, then that’s fine too! Just because you don’t want to offer a layaway plan, doesn’t mean you can’t give some flexibility to your customers.

What you’ll need is a payment management system capable of accepting multiple forms of payment. Oscar POS is one POS in Karachi that offers many modes of payment, including debit and credit card. That way, your customers can comfortably pay however they want.


Every business has its own way of running things. For layaway plans, all that matters is clarity for the retailer, and freedom for the consumer.