DEFINITION of 'Layaway'

A purchasing method that allows a consumer to put a product on hold by placing a deposit on the item. Layaway allows the customer to make smaller payments on the product until the purchase price is paid in full, rather than paying for the item with credit and adding interest to the cost. A layaway plan ensures that the chosen merchandise will be in stock and ready for pick-up when the final payment is made.


This method works for consumers who have a limited amount of disposable income and are unable to make larger purchases all at once. It also works to retailers' advantage by allowing them to offer products to lower-income customers. Layaway can also be used as a savings plan; because the customer has already made a commitment to purchase the product on layaway, he or she can not give in to temptation to spend the money elsewhere.

  1. Personal Finance

    All financial decisions and activities of an individual or household, ...
  2. Savings Account

    A deposit account held at a bank or other financial institution ...
  3. Disposable Income

    The amount of money that households have available for spending ...
  4. Savings

    According to Keynesian economics, the amount left over when the ...
  5. Budget

    An estimation of the revenue and expenses over a specified future ...
  6. Personal Income

    Total compensation received by an individual. Personal income ...
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