Why use layaway if you have to save money anyway

[DavidSnider]

http://www.msnbc.msn.com/id/32541689/ns/business-consumer_news/

I don't really understand the concept of this. If you are purchasing an item in installments and can't pick it up until it is payed off, why not just save the money in the first place and avoid the layaway fee?

 

[Choppy]

Usually it's because you want that partcular item - something that might go out of stock and not be ordered in again, or you're purchasing something that's one of a kind. I wouldn't pay a layaway fee though. That's something that can be negotiated away if it exists at all.

It also offers a way of paying for something in installments without racking up credit card interest charges, or for people who have bad credit.

 

[brainstorm]

From the perspective of the business, it allows some of the sales revenue to be taken prior to the moment of purchase, had the buyer saved and bought as you suggested.

For the buyer, layaway may be a way to take advantage of a sale price at a particular moment. A really rational consumer would weigh the discount of the sale price against the amount of interest that could be earned in a savings account in the time it takes to save up for the item.

The best way to save money is to forego purchases completely, of course, but temptation and necessity often obstruct that level of rationality.

 

[DaveC426913]

In the case of the article, the purchasers can rest assured that the things they've put on layaway will be there when they go to get them. They won't be out of stock.