Jewelry Layaway: How It Works and How to Manage It

What layaway is

Layaway is one of the oldest and most powerful tools a jewelry store has. A customer can commit to a piece they can't pay for all at once, with no lender, no interest and no credit check. You simply hold the piece until it's paid off. But layaway only works when it's tracked properly.

How a layaway plan works

Here's how a layaway plan works. Take a deposit, typically 10 to 20 percent, and agree on the payment schedule: weekly, every two weeks, or monthly. The piece is pulled from sellable stock, and the customer pays down the balance on schedule. Reminders keep the payments on track, and once the balance hits zero, the customer takes the piece home.

Deposit and payment-plan best practices

Require a real deposit, 15 to 20 percent, and cap the term at 60 to 90 days. Longer plans tie up inventory and raise the risk of default. Set a minimum payment, so a plan doesn't stall at a tiny balance, and put the terms in a signed layaway agreement. And automate the reminders. Most missed payments are simple forgetfulness.

Default and refund policy

Decide your default and refund policy before you write your first layaway. A restocking fee refunds the payments minus a set fee, often the deposit. Store credit returns the balance as credit instead of cash, so the customer stays with you. And a grace period gives 10 to 15 days past a missed payment before a plan counts as defaulted. Some states regulate layaway disclosures and refunds, so check your local rules, and put the terms in writing either way.

Layaway vs financing vs buy now, pay later

With layaway, the customer waits for the piece, but pays no interest and needs no credit. Financing, and buy-now-pay-later plans like Affirm or Klarna, let the customer take the piece home today. You pay a merchant fee, and the lender carries the risk. Many stores offer both, and a good point of sale handles either one at the register.

Why spreadsheets fail at layaway

Tracking layaway in a notebook or a spreadsheet breaks down fast: balances get out of sync, reminders get missed, reserved pieces get sold off the floor, and you can't see how much cash is tied up in open plans.

Layaway in WJewel

Here's layaway in WJewel. At the register, enter the deposit, for example, $100 in cash, and put the rest on layaway. Inventory shows which pieces are on layaway, so nobody sells a reserved piece off the floor. In the Sales menu, Layaways has every open plan. See the list of open layaways, take payments, and mark them as picked up when they're paid off, and text every customer who hasn't made a layaway payment in, say, the last 30 days.

Contact us

You'll find the full guide on the WJewel blog. WJewel is fully web-based, and runs on PCs, Macs, tablets and phones. To learn more, visit www.wjewel.com, or call us at (646) 578-8300.