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Walmart does away with layaway, moves to Affirm for customers instead

Adkins
Legendary Contributor

Walmart does away with layaway, moves to Affirm for customers instead

Walmart has decided to scrap its layaway program completely before the 2021 holiday season, replacing it with a buy now, pay later financing option. 

 

The retailer is now using the company Affirm, which partnered with Walmart in 2019, to replace layaway. Instead of having stores hold items from late August through mid-December while customers make payments until paid in full, shoppers can now take the item home immediately and pay it off with Affirm.

 

Unlike layaway, purchases made with Affirm may charge customers interest. Although Affirm does not charge any hidden or late fees for using its services, customers can have an APR rate on purchases of 10-30% depending on their credit and 0% for select promotional items on Walmart.com.

 

Not all Walmart customers may be eligible to use Affirm depending on their prequalification status. The service can be used on purchases ranging from $144 to $2,000 and excludes items like alcohol, groceries and food, personal care products, and pet supplies.

 

Per Business Insider.

 

Walmart has been phasing out layaway but this sucks for low income people who may not qualify for Affirm, and then even if they do, they may have to pay interest now.  

Last HP 06-30-2022



Message 1 of 10
9 REPLIES 9
CreditMagic7
Super Contributor

Re: Walmart does away with layaway, moves to Affirm for customers instead

Now if they could only ditch Capital One for a better issuer of their cards. 

Message 2 of 10
Jedibarber007
New Contributor

Re: Walmart does away with layaway, moves to Affirm for customers instead

Makes sense especially for holiday season!

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Message 3 of 10
Janus
Senior Contributor

Re: Walmart does away with layaway, moves to Affirm for customers instead

I can totally understand this move for any retailer, it's a costly service to have on property as it requires a hunk of dedicated space someone to oversee it and at a very low fee if one at all. So it's much easier for them to make it a 3rd party problem so that all they have to do is sell merchandise. As much as it sucks for those without credit I guess it will teach the concept of spending only what you have and to save in advance for those things. However, one aspect is the high APR that people are going to get stuck with and can severely add up on large purchases versus a $5 down layaway fee.

 

 

 

 

 

 






Message 4 of 10
SoCalGardener
Valued Contributor

Re: Walmart does away with layaway, moves to Affirm for customers instead

I think this sucks. Big time. Smiley Mad

 

Personally, layaway hasn't even entered my mind in decades. I really wasn't even sure anyone still offered it. But I remember when I made good use of it, at Sears, and how grateful I was to have that option. When my daughter was little, and after my first major [as in catastrophic] medical issue, we lost all the credit we'd acquired. Sears--back when their Christmas "Wishbook" was a big thing--gave me the opportunity to order all the stuff I wanted to make my daughter's Christmas amazing, without having to come up with a big chunk of money all at once. Paying $5 a week or whatever it was back then, spread out over a few months was a real blessing. When you're THAT broke, it's easier said than done to just SAVE UP the money. In other words, it's easy to say "well you could have put $5 a week aside for several months and then used that...." But, in practice, that never worked. When you're scraping the bottom of the barrel, it's too tempting to have $10 set aside for a purchase and not touch it!

 

Sorry for rambling. I just feel sorry for people who've relied on layaway and in all likelihood can't qualify for credit--or, if they can, they'll get AWFUL interest rates/fees, adding to their already-bad financial problems.

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Message 5 of 10
MichaelMyers
Regular Contributor

Re: Walmart does away with layaway, moves to Affirm for customers instead

30%. That's a horrible interest rate. Seems rather predatory.
Message 6 of 10
SoCalGardener
Valued Contributor

Re: Walmart does away with layaway, moves to Affirm for customers instead


@MichaelMyers wrote:
30%. That's a horrible interest rate. Seems rather predatory.

No kidding! And, let's be realistic about this, the people who could get 10% aren't going to be customers who used layaway. I'm willing to bet that 99% of the people who do apply for this credit will be at the 30% end of the 10-30% APR scale. Predatory? Should be criminal. Taking that kind of money from the people who can least afford it is just not right.

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Message 7 of 10
Janus
Senior Contributor

Re: Walmart does away with layaway, moves to Affirm for customers instead

While I agree the rates should be capped because they're essentially just feeding into the problem of debt, it's not like other big name banks are any better with starting rates of 22%. Granted a lot of us here PIF every statement so high APR are moot, but 60% of America doesn't do that for the most part. And from their point of view you can't make very much Money off people with $500-1000 Limits at only 10% interest. 






Message 8 of 10
SoCalGardener
Valued Contributor

Re: Walmart does away with layaway, moves to Affirm for customers instead


@Janus wrote:

While I agree the rates should be capped because they're essentially just feeding into the problem of debt, it's not like other big name banks are any better with starting rates of 22%. Granted a lot of us here PIF every statement so high APR are moot, but 60% of America doesn't do that for the most part. And from their point of view you can't make very much Money off people with $500-1000 Limits at only 10% interest. 


You know what's funny? Even though I PIF for every card that isn't 0%, it still bothers me to see a high APR!  My Capital One cards have the highest APR of any of my cards, and I hate seeing them!

 

Good points, though. At least 30% doesn't come close to those horrid payday loans, with interest rates so high that customers end up in a perpetual trap of INCREASING balances, even though they're making payments. I've heard that a lot of them end up in an endless cycle of adding more and more debt on those loans, because they can never catch up enough to pay them off. Why this isn't illegal everywhere is beyond me!

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Message 9 of 10
stonedog23
Frequent Contributor

Re: Walmart does away with layaway, moves to Affirm for customers instead

The OP equated low income and not being able to qualify for Affirm.  Isn't Affirm credit based as opposed to income based?  You can be rich with poor credit and low income with good credit.  At one time I was low income with decent credit, but I knew I didn't want to pay interest on Christmas purchases at Walmart by using my credit card, so I used free layaway.  I just hope that there aren't many people defaulting with Affirm financing.  I wish Walmart would revisit this decision, but with "help wanted" signs at every Walmart I've been to lately, I assume they don't have the staff to handle tons of layaways.  

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