layaway payment

Payment Methods In POS: Layaway Payment

The holiday seasons are usually a stressful time for businesses – no matter large or small. Stores crowded with customers trying to squeeze in last gifts before the D-day. And as retailers, it’s best for your brand to make the buying process easier for clients. Having a layaway payment option in the holidays is always a favourite of both sellers and buyers, especially when it is implemented into your POS system

Even so, many people have yet to truly understand layaway. So let’s dive in and explore how the layaway method works and its advantages. 

What is a layaway payment?

Layaway is a purchasing method in which a customer places a deposit on an item and then they could pick up the item later when the balance has finished paying off.

Most layaway payments follow the same 4 basic processes:

  1. Select item, enter agreement: customers pick out the products that they want to put on layaway, agree on what method used to pay (card/cash)
  2. Confirm with down payment: retailers choose the amount of the down payment (a certain amount/percentage of the product’s total value)
  3. Pay in installments: frequency of payment (weekly/monthly/yearly)
  4. Item pickup: once the final payment is made, products are ready for customers to pick up

The method is straightforward but still, there are some complicated fees hidden behind:

  • Service fee: covers the store’s cost of processing, tracking ongoing payments, and keeping them off the shelves
  • Cancellation fee: applied when customers decide to cancel the plan or the payment wasn’t made by the due date
  • Restocking fee: if customers don’t make the payment on time 
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How layaway payment works in the POS system

Layaway payment in a POS tracks and manages order payments from beginning through completion finalizes and provides reports about customers, items, and payments. 

For online layaway payments, customers could purchase items via scheduled deductions that are taken from their account. With the online option, there are no more storage costs. The products remain at the distribution centre instead of the warehouse so they won’t take up space.

Benefits of layaway payments to businesses

Layaway payments bring your products to a broader audience, especially those with lower income. Furthermore, it helps businesses gain customers that might not make a purchase.

Customers who are debating on getting a product are more likely to buy if they can spread the payments over time without worrying about any interest. In a survey, 36% of respondents said that the layaway option helps them purchase more expensive products; 31% said they wouldn’t make the purchase at all if it wasn’t for layaway.

The method aims to limit risk for retailers and pose as a great alternative for an offering from even large – scale businesses to small stores. It could also be easily offered both online and offline stores.

Ever since the case of Covid- 19, more people consider using layaway as a better option. They are aware that their accounts are getting deducted, so they won’t accidentally spend that amount elsewhere.

Many brands offer layaway payments for customers and are making a hit with their considerate programs and policies. For instance, Walmart, KMart, Burlington all have layaway policies of $10/10% deposit fee, $5/$10  service fee, available for cancellation, layaway period lasts from 1 to 12 months. All are flexible terms and conditions, suitable for holidays purchase.


Layaway payment is a great option for both retailers and customers, bringing a range of goods into the hands of those who might not have the means. With little to no risk for both parties, no wonder layaway payment is making its rise in recent time.

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And as business retailers, your POS system should support this feature. At ConnectPOS, we offer cutting edge technology and devices compatibility POS software, perfect for your layaway sales. Contact us for your free trial.

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