As a retail and consumer behavior expert with over a decade of experience, I‘m often asked about the payment options available at popular stores like Big Lots. One question that comes up frequently is whether Big Lots offers layaway, a traditional installment payment plan that allows shoppers to reserve items and pay for them over time. In this comprehensive guide, I‘ll break down everything you need to know about Big Lots payment options and share my insights on how to make the most of them as a smart, savvy shopper.
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The Rise and Fall of Layaway in Retail
To understand the payment options at Big Lots, it‘s helpful to first look at the history and evolution of layaway in the retail industry. Layaway became popular during the Great Depression as a way for cash-strapped consumers to afford essential items by paying in installments. Retailers would hold the item for the customer until they paid it off in full, usually over a period of 8-12 weeks.
Layaway remained a common payment option for decades, particularly at big-box discount stores like Kmart and Walmart. However, the use of layaway has declined significantly in recent years. According to a 2019 report by CreditCards.com, only 7% of retailers still offered layaway, down from 14% in 2018.
Several factors have contributed to the decline of layaway:
- The rise of credit cards and other financing options
- Increasing consumer demand for instant gratification
- Logistical challenges and costs for retailers to administer layaway programs
- Competition from online retailers offering fast, free shipping
As a result, many retailers have phased out layaway in favor of alternative installment payment plans, such as buy now, pay later (BNPL) services and lease-to-own programs. These options allow customers to take items home immediately and pay over time, often with more flexibility than traditional layaway.
Does Big Lots Have Layaway?
So, does Big Lots still offer layaway in 2023? The short answer is no. Like many retailers, Big Lots has shifted away from traditional layaway in recent years. However, they do offer several alternative payment options that serve a similar purpose of helping customers afford purchases over time.
Big Lots Leasing Program
One of the primary installment payment options at Big Lots is the leasing program, which is available for select big-ticket items like furniture, mattresses, appliances, and electronics. Through a partnership with Progressive Leasing, Big Lots allows customers to take items home today and pay for them in installments over 12 months.
To qualify for the leasing program, customers must:
- Be at least 18 years old
- Have a verifiable source of income
- Have an active checking account
- Provide a valid ID and Social Security number
Compared to layaway, the leasing program offers several advantages:
- No credit check required (though Progressive Leasing does a soft pull)
- Take items home immediately instead of waiting to pay in full
- Flexible payment options (weekly, bi-weekly, or monthly)
- 90-day payment option and early buyout options available
However, there are also some potential drawbacks:
- Interest rates and fees can add significantly to the total cost
- Customers don‘t own the item until all payments are made
- Late or missed payments can result in additional fees and penalties
- Item can be repossessed if payments are not made
As of 2023, the following Big Lots product categories are eligible for leasing:
- Furniture (sofas, sectionals, dining sets, etc.)
- Mattresses
- Appliances (refrigerators, washing machines, etc.)
- Electronics (TVs, laptops, tablets, etc.)
The minimum purchase amount for leasing is typically $150-$250, and the maximum amount varies based on the customer‘s income and other factors.
For example, let‘s say you want to purchase a new living room set at Big Lots that costs $1,500. With the leasing program, you could take it home today and pay around $150 per month for 12 months, for a total cost of approximately $1,800. That‘s a premium of $300 over the original cash price, but it allows you to enjoy the furniture now and spread out the payments.
Big Lots Price Hold Program
Another payment plan option at select Big Lots stores is the Price Hold program, which is available for furniture purchases. With Price Hold, customers can reserve furniture at the current sale price and pay for it over a set period (usually 30-90 days) without any interest or fees.
To use the Price Hold program, customers must:
- Make a down payment of at least 10-20% of the purchase price
- Provide a valid ID and contact information
- Agree to pay off the remaining balance by the end of the price hold period
- Make payments in store (cash, credit, debit, or check accepted)
Unlike the leasing program, the Price Hold option does not allow customers to take the furniture home until it is paid in full. However, it does offer some advantages over traditional layaway:
- Locks in a discounted sale price for the duration of the hold period
- No credit check or income verification required
- Flexible payment schedule (pay at your own pace as long as balance is paid by end of hold period)
- No interest or fees as long as payments are made on time
For example, if you find a $1,000 dining set on sale for $800 at Big Lots, you could put it on Price Hold with a 20% down payment of $160. You would then have 30-90 days (depending on the store‘s policy) to pay off the remaining $640 balance. As long as you complete the payments by the end of the hold period, you can pick up the dining set and avoid any interest charges.
One important thing to keep in mind with the Price Hold program is that if you fail to pay off the balance by the end of the hold period, you may forfeit your down payment and the item will go back on the sales floor. Be sure to carefully consider your budget and ability to complete the payments before putting an item on Price Hold.
Big Lots Credit Card
Big Lots also offers a store credit card that can be used for purchases online and in-store. The Big Lots credit card, issued by Comenity Bank, allows customers to pay for purchases over time with flexible monthly payments.
Some key features of the Big Lots credit card include:
- No annual fee
- Exclusive cardholder discounts and coupons
- Option to pay bill online, by phone, or in store
- High variable APR (29.99% as of 2023)
To qualify for the Big Lots credit card, customers must submit an application and consent to a credit check. Credit approval and credit limit are based on factors like income and credit history.
While the Big Lots credit card can provide flexibility in making larger purchases, it‘s important to use it wisely to avoid accumulating high-interest debt. Experts generally recommend paying off the full statement balance each month to avoid interest charges, which can add up quickly at nearly 30% APR.
Making the Most of Big Lots Payment Plans
So, how can you decide whether a Big Lots installment payment plan is right for you and make the most of it? Here are some key factors to consider and tips to keep in mind:
Is it a need or a want?
Installment plans can be helpful for affording essential items like appliances or mattresses when you don‘t have the cash on hand. However, they can also tempt you to overspend on non-essential purchases. Be honest about whether the item is a true need or just a want that can wait.
Does it fit your budget?
Before using a Big Lots payment plan, take a close look at your budget and make sure you can comfortably afford the recurring payments. Consider both the monthly payment amount and the total cost of the item with interest and fees.
For example, let‘s say you‘re considering using the leasing program to purchase a $500 TV at Big Lots. The monthly payment might be around $50, which sounds manageable. However, if you end up paying $50 per month for 12 months, you‘ll end up paying $600 total – a $100 premium over the original price. Make sure that extra cost is worth it and that you‘re not stretching your budget too thin.
Have you shopped around?
Before committing to a Big Lots payment plan, make sure you‘re getting the best deal possible. Compare prices and financing options at other retailers, both online and in-store. Don‘t forget to factor in any discounts, coupons, or cashback rewards you may be eligible for.
Are you clear on the terms?
Carefully read the fine print of any Big Lots payment plan agreement before signing up. Make sure you understand the interest rate, fees, payment schedule, and any other key terms. If anything is unclear, don‘t be afraid to ask questions or walk away if the deal doesn‘t feel right.
Can you pay off early?
If you do use a Big Lots payment plan, make it a goal to pay off the balance as quickly as possible to minimize interest and fees. Consider making extra payments when you can or opting for a shorter repayment term if available.
Do you have a backup plan?
Even with the best intentions, unexpected financial setbacks can happen. Before signing up for a Big Lots payment plan, make sure you have a backup plan in case you can‘t make a payment. Communicate with Big Lots or the financing company proactively and see if they offer any hardship options. Avoid skipping payments, which can result in late fees and damage your credit.
The Future of Retail Financing
The payment options available at Big Lots reflect a larger trend in the retail industry towards alternative financing options. While traditional layaway may be fading away, installment payment plans like BNPL and leasing programs are becoming increasingly popular, particularly among younger consumers.
According to a 2022 report by Experian, the use of BNPL services grew by 39% from 2020 to 2021, with Gen Z and Millennial consumers driving much of that growth. The most common reasons consumers cited for using BNPL were to avoid credit card interest, spread out payments, and make purchases that otherwise wouldn‘t fit their budget.
However, the rise of these alternative financing options has also raised concerns among consumer advocates. Critics argue that BNPL and leasing programs make it too easy for consumers to overspend and fall into debt, particularly those with limited financial literacy. According to a 2022 survey by Consumer Reports, 34% of BNPL users fell behind on one or more payments.
As a savvy shopper, it‘s important to approach any retail financing option with caution and a clear understanding of the terms and potential risks. Installment payment plans can be a useful tool for affording necessary purchases and building credit when used responsibly, but they can also tempt you to spend beyond your means.
Ultimately, the key to making the most of payment plans at Big Lots or any retailer is to do your research, crunch the numbers, and make sure the purchase fits into your larger financial goals and values. By taking a thoughtful, proactive approach to retail financing, you can enjoy the convenience and flexibility of installment payments while avoiding common pitfalls.
Key Takeaways
- Big Lots does not offer traditional layaway, but does have several alternative installment payment options, including a leasing program, a price hold program for furniture, and a store credit card.
- The leasing program allows customers to take items home today and pay for them over 12 months, with no credit check required. However, interest rates and fees can add significantly to the total cost.
- The price hold program allows customers to reserve furniture at a sale price and pay it off within a set period (usually 30-90 days) with no interest. However, down payments may be forfeited if payment is not completed on time.
- The Big Lots credit card offers flexible payments, exclusive discounts, and no annual fee, but has a high variable APR of 29.99%.
- To make the most of Big Lots payment plans, carefully consider your budget, shop around for the best deal, read the fine print, and have a plan to pay off the balance as quickly as possible.
- The rise of alternative financing options like BNPL and leasing programs reflects a larger trend in the retail industry, but also raises concerns about consumer debt and financial literacy.
- As with any financial decision, using a Big Lots installment payment plan wisely requires careful research, budgeting, and a commitment to responsible credit use.
