Layaways

A layaway sale occurs when a customer wants to purchase an item in stock and rather than pay for it now, puts a deposit on that item and will pay the balance at a later date.

We would always rather make the sale and deliver it now rather than later. Encourage the customer to apply for financing. If the customer cannot finance and must do a layaway, arrange for the shortest layaway possible. 90 days is the longest period of time for any layaway.

The customer must put at least 20% of the purchase price down on the layaway.

When the chosen time period is almost up or when the customer hasn’t made any payments for some time, the customer needs to be called to find out of they intend to pick up the layaway by the due date. Customers sometimes forget about the layaway and a reminder call may create a sale that can be counted for the current week.

Salespeople should check their layaway list weekly. The sales manager should check it periodically as well to make sure there aren’t any that are past due.

There are many reasons that we wouldn’t want something to sit on layaway for a long time. Sometimes we have had an item on layaway, ordered a replacement, and then the customer canceled the layaway and we were left with an extra one in stock.

In other cases, an item had been in layaway so long that it had become over a year old and when the customer canceled, we had to discount the piece to move it. Nothing that is in layaway can be sold for cash today, and if it never gets picked up we probably lost more than just that one sale.

We don’t want to put memo items on layaway unless we get permission from the vendor. Get an okay in writing to return the item if the layaway is not picked up.

Rolex watches cannot be put on layaway. The profit margin is too low and we sell them so fast that it makes no sense to do layaways. However, the customer can make AR payments to save up enough money on account to buy the watch outright.

Hot items should not be put on layaway. They will sell right away for cash. If there is any question about it, the COO has the final say about whether an item can be put on layaway.

Inventory should also check layaway items monthly and send an inquiry to the salesperson with a copy to the sales manager on any that are older than 90 days or past their due date.

It’s especially important that the layaways are cleaned out at the beginning of December since we want our entire inventory out in the cases available for sale.

The salesperson MUST contact the customer before any layaway is canceled or returned to stock. We don’t want any upset customers.

IN SUMMARY

1. Layaways are held for 90 days only
2. The deposit must be at least 20% of the sold price of the item.
3. Only stock items can be placed on layaway – no memo items or special orders can be placed on layaway.
4. Rolex watches cannot be put on layaway.
5. Hot items cannot be put on layaway.
6. Layaways are checked weekly to call any that are overdue.
7. Customers must be contacted before layaways are canceled.