(ABC4) – Retailer Walmart will change its guidelines for the traditional layaway program this year, replacing it with a new funding program called “Buy Now, Pay Later”.
The new program is in partnership with Affirm, a loan company that provides installment loans for retail purchases. Officials are promoting this program as an “alternative to the layaway”.
Traditionally, Walmart has offered a long-term layaway program that allows buyers to leave a deposit and collect the item after paying interest-free installments over time. With the new program, you can first take home purchases and then pay off the amount over time.
Most purchases come with a fee of between 10% and 30% APR, depending on your creditworthiness and the item purchased. Some items still have an APR of 0%. However, this is usually a promotional offer that only affects certain items.
The list of eligible items under the new program has also been updated. With every purchase, the effective annual fees are indicated in advance without interest costs. The program has no late fees or annual fees.
Walmart representatives say the traditional layaway program has lost popularity in recent years.
“We have learned a lot over the past year as our customers’ needs and shopping habits have changed,” says a Walmart representative. “Last Christmas season we removed seasonal breaks in most of our stores, with the exception of select trinkets in select stores, and based on our findings, we are confident that our payment options provide the right solutions for our customers.”
Walmart was tinkering with removing the layaway program back in 2006 as usage declined. The retailer brought the program back for a limited time in 2011 and then reintroduced the entire program in 2012.