A big change is coming for many, if not all Walmart stores.
WRAL reported that the retailer will not be offering layaway this holiday season.
Normally, stores would open the layaway system, where a shopper can pay over time after placing a deposit, in August with pickup in mid-December with no interest charged.
But this year, Walmart has changed to a company called Affirm, which it is marketing as an “alternative to layaway,” Penn Live reported. Instead of the store holding the items, the purchaser gets them immediately and they have 3 to 24 months to pay the bill. The timeframe allowed to pay for purchases depends on the amount spent, according to Walmart’s website.
There is a finance charge with an APR rate of between 10% and 30% depending on a person’s credit rating. There will also be some items offered at a 0% APR.
The companies make their money by charging merchants per transaction also, according to The Wall Street Journal.
It sounds a lot like a credit card, but it is different, according to The Wall Street Journal.
There are no late fees, prepayment fees, annual fees, or opening and closing fees and it can only apply to some categories, like electronics, toys and jewelry not everything in the store. For a complete list of what’s eligible and how it works, click here.
You also don’t have to pay the whole amount by the end of the month or risk interest fees. But if you do miss a payment you could get charged a fee or not be allowed to use the system another time, according to The Wall Street Journal.
Walmart had announced in 2006 that it was doing away with layaway, citing declining use at the time. The company offered other options at the time like its credit card. The layaway system was brought back in 2011 in a limited program, applying to electronics and toys. In 2012, it brought layaway back fully.
Other companies are also offering similar buy now, pay later options through Affirm or other services like Klarna and Afterpay, according to The Wall Street Journal.
The company has not officially said it is doing away with layaway, however, when asked on Facebook on a post originally made in 2014 but that has been commandeered by shoppers this year, it has suggested shoppers reach out to their local stores for information about what is available. Shoppers and people who claim they work at the stores say corporate decided to do away with layaway this year.