Layaway: Why does exist?

[Asher]

I'm very annoyed by the ads promoting this. How does it make sense?

The idea, as I gather (and this is new to me), is to pick out items to purchase which the store then holds. You make small incremental payments over time towards it (usually with an associated "layaway" fee?) and only get it when it is fully paid for.

WHY?

Why not just save up your money until you have enough to buy the damn thing?

The only conceivable purpose of this I can see is when the product is in insanely high demand and you want to be sure you can get it when you have the money.

Otherwise you're just giving the store money to invest/earn interest on instead of you?

[DanS]

I guess that it's for people who don't have good credit and/or have trouble saving for large purchases.

It has never made sense to me either.

[asleepathewheel]

Layaway
Pay day lending
The Lottery
Rent-to-Own


Ticket to the good life.

[Asher]

Originally posted by asleepathewheel
Layaway
Pay day lending
The Lottery
Rent-to-Own


Ticket to the good life.

All of those suck as well.

[KrazyHorse]

It's a means of precommitting to saving for the item in question. Same with people who pledge to their friends to quit smoking or lose weight. There is an additional cost associated with failing, so you are less likely to fail.

Individuals are not always rational actors. They might know that making a purchase (or quitting smoking) is in their long-term interest, yet display irrationality during certain periods. Layaway is "meta-rationality" to allow the individual to protect himself from his own irrationality.

edit: wrote "rationality" in one instance when I meant "irrationality". Fixed.

[SlowwHand]

Layaway was a big thing. Then a lot of people went the instant gratification, credit card route. I'm glad to see layaway making a return.

[Grandpa Troll]

For poor country people, who want a specific item, its a good way to secure it, pay on it and get what you want

Not evryone has cash and not everyone has credit which is not the way to go either

Gramps

[Grandpa Troll]

Originally posted by SlowwHand
Layaway was a big thing. Then a lot of people went the instant gratification, credit card route. I'm glad to see layaway making a return.

I remember W T Grants, Mammoth Mart, JJ Newberry and F W Woolworth all offered this back in late 60's and early 70's

[Felch]

KH is

Layaway isn't about the on paper logic of a situation, necessarily. It's often about the psychological logic of it all.

It's certainly better than plunging into credit card debt.

[Deity Dude]

Layaway = Paying a company a fee to hold your money interest free which they invest and earn interest on so you can buy their product.

What a scam.

[Kidlicious]

Originally posted by Felch
It's certainly better than plunging into credit card debt.

No it's not. When you buy on credit you get the thing right away. The only value I see for it is for gifts at Christmas time. I've never used it though.

[Grandpa Troll]

Originally posted by Deity Dude
Layaway = Paying a company a fee to hold your money interest free which they invest and earn interest on so you can buy their product.

What a scam.

But the company is also holding onto merchandise they cannot turn an immediate profit on.

So both sides win, maybe the company allowing the layaway does, but not like anyones making people do this, it is just an option

Gramps

[Asher]

It's a stupid tax for people who have no willpower. Like smokers. Looks like a great idea, then.

[Kidlicious]

If it weren't for stupid people a lot less money would circulate in the economy.

[Asher]

Originally posted by Kidicious
If it weren't for stupid people a lot less money would circulate in the economy.

Yes, the economy relies on people like you.

Looks like a great idea, then.