6 Tips for Running a Layaway Program

By Mikal E. Belicove|For Entrepreneur.com|September 6, 2012

With the holiday shopping season fast approaching, and the recent news of major realitors such as Toys R Us and Walmart retooling their layaway programs, many smaller merchants I’ve talked to are considering adding a layaway option.

A layaway program has the potential to build brand loyalty and drive repeat traffic to yourretail business. First, decide if offering a layaway program will work for your business. To answer that question, look at your business model and determine what (such as value proposition, channels, revenue streams and cost structure) will need to change in order to run an effective layaway program.

If you determine that it might increase business, here are six tips to help you successfully create a layaway program:

1. Create a layaway agreement. Everything about your layaway program should be clearly spelled out in a document that your customer agrees and signs. Terms and conditions should include: minimum price for items, payment options, deposit amount required, service fee, policy on cancellations and refunds, lowest price guarantee, items not eligible for layaway, and final payment due date.

2. Start now. The sooner you start your layaway program, the more people will know about it, participate in it, and potentially tell others about it via on and offline word of mouth.

3. Promote the heck out of it. This should go without saying, but you need to inventory all of your customer touch points to determine the best way…

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