In most cases, the pros of buying jewelry on layaway include flexibility in payment planning and low if not zero interest, but there are cons, too. Common downsides are the inability to exchange a purchase once payments have started, the often severe consequences of missing a payment, and the risk of price inflation or deflation. Layaway plans can be a great way for people to purchase jewelry that costs more than they can afford in the moment, but at the end of the day it is a financial transaction, and it must be viewed as such. What a purchaser can gain through the ease of installment payments he can also lose in poor planning.
The ability to pay slowly over time for a piece of jewelry is usually the biggest benefit to layaway shopping. Purchasers are able to make their selections, then pay them off directly to the retailer. Retailers often charge a small service fee for layaway payments, but do not typically assess interest. This is an immediate benefit to putting jewelry on layaway rather than resorting to other means of financing such as loans or credit extensions.
Most of the time, jewelry retailers are willing to be somewhat flexible with purchasers when it comes to setting up a layaway payment plan. Customers can often pay in as many installments as they like, but must generally pay the piece off within a set number of weeks or months. There are usually a lot of payment options, too. Online layaway debits, in-hand cash transactions, and automatic bank draws are among the possibilities.
The cons of putting jewelry on layaway usually emerge when payments are missed or are late. A customer who charges an expensive piece of jewelry on a credit card may be hit with fines if he misses a payment or pays late, but he will get to keep the jewelry provided he makes the payments eventually. The same is not usually true with most standard layaway plans.
When a customer puts a piece of jewelry on layaway, he almost always leaves it at the store. He will be able to pick it up only once he has paid it off in full. Different retailers have different policies, but often times, a missed payment or deadline results in an automatic forfeit of the item in question. Deposits and sometimes even all installments paid are usually sacrificed, as well.
Another con of purchasing jewelry on layaway has to do with the constantly shifting value of many precious metals. Gold, platinum, and silver are among the jewelry bases that take their worth from international market activity. Usually, buying jewelry on layaway locks in its price. Should the value of the piece decline substantially during the life of the layaway, there is usually no adjustment. Purchasers are obligated to pay the price of the jewelry as it was the day the finance relationship was established.