A Layaway Plan
for Your Jewelry -

should you offer this payment option?

© by Rena Klingenberg; all rights reserved

A layaway plan can make it easier for customers to buy your jewelry. But it involves detailed recordkeeping and extra time on your part. Here are some points to consider, and examples of layaway forms:

First of all, what is a layaway plan? It's a payment system where the customer puts down a deposit on specific merchandise that's held by the seller until a later date, when the customer finishes paying in full.

Usually the balance is paid in scheduled installments, but sometimes it's paid off in a single payment.

You can increase your jewelry sales by offering your customers easy-payment options such as a layaway plan. However, consider that layaway also involves additional paperwork, time, and organization on your part.

If you do decide to implement a layaway program for your jewelry business, I recommend offering it only for purchases over a certain dollar amount - decide at what sales level it's worth handling the extra details involved in the transaction.

For example, it wouldn't be worth your time to keep records and handle installment payments for the sale of a $12 pair of earrings - but it would definitely be worthwhile for a $400 pair of earrings!

Consider your jewelry line and price points, and determine where to draw the line for your own business.

You can use a layaway program to encourage larger orders and repeat purchases. Customers may be motivated to make a larger purchase of several items if it enables them to take advantage of the opportunity to make installment payments.

And you can gain repeat business by offering them new pieces to put on layaway when they pay off and pick up their previous layaway purchase.

If you do decide to offer your customers a layaway option, be sure to determine your terms, policies, and payment schedule carefully - and write them out clearly and simply. Consider such issues as

• Whether you'll refund any of the payments already made if the customer decides not to finish buying the item.

• How much of an initial deposit you require.

• Whether you'll add on a service charge for handling the installment payments.

• Which purchases are eligible for layaway.

• How frequently the customer makes payments, and how strict you'll be about delinquent payments.

• How long of a total layaway period you're willing to offer.

Also, you'll need to find a good place to store the layaway jewelry items. They'll need to be kept separate from the rest of your inventory so you can locate them when they're paid in full - and you don't want to accidentally sell them to someone else in the meantime!

Lots of unexpected issues can come up if you offer a layaway plan. Here are some tips for heading off problems before they start:

• Get several types of contact info from the customer - work and home phone numbers, email, and mailing address. Communication is one of the keys to success in this type of transaction.

• Fill out a two-part receipt for the initial deposit and for each payment received thereafter; be sure both parties get a receipt of each transaction.

• Have the customer sign and date a pickup receipt when they pay off and retrieve the layaway item.

• Clearly spell out the amount of the customer's required payment installments, and when they are due. Contact them immediately when an installment is missed.

• Make sure the customer understands your refund (or no refund) policy.

• Name and describe the layaway jewelry item(s) and price very clearly on the layaway form so there can't be a dispute later.

• Have an attorney look over your policy and form to be sure they follow regulations set by the Federal Trade Commission and your particular state. Also, ensure that your layaway agreement legally protects your interests no matter what your customer does with his/her end of the bargain.

layaway plan and policies

layaway agreement and order form

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Personally, I prefer not to handle all these record-keeping and installment-payment details. I'd rather accept credit cards than set up and manage a layaway plan.

That way my customers can pay their credit card company in installments if they choose, while I receive my payment up front and in one sum. And the jewelry goes from my possession to the customer's immediately, instead of having to be set aside on hold till I receive full layaway payment at a future date.

This way I don't have to keep records of customers' deposits and payments, monitor their payment deadlines and call when a payment is overdue, arrange for a time and place to get their jewelry to them, or find a safe place to store their jewelry till they finish buying it.

And none of my inventory is tied up waiting for them to complete the transaction.

However, depending on your particular jewelry business and customers, offering layaway may be a very good option for you to consider - particularly if it encourages more high-dollar sales. Just be sure to protect your own interests, make your policies clear, and have an attorney look over your layaway plan.

Increase Jewelry Sales with Layaway
When Valerie Gillis increased the quality and prices of her jewelry, her sales slumped. Find out what happened when she started offering a layaway payment plan for her jewelry.