What to Do When Things Go On Consignment

Most of the items that you sell at a consignment store are going to be priced quite low. Typically, your items will cost between five dollars and $50 in total. This means that most of the people who shop with you will be buying items with cash. However, there may be items in your consignment store that will cost more, even hundreds of dollars more, and that brings in the question of layaway.

What is Layaway?

Layaway is a program where a customer will buy an item from a store when they donít have the money to buy the entire product. To buy the product, they put down a deposit and pay for the product over the course of a few months or weeks. Once they have paid for the product in full, they can take the product home. As the store owner, you get money down on a product, and the customer gets the ability to reserve a product even if they donít have enough money to buy it at that point.

Forgotten Layaways

For whatever reason, even though they have put money down, many customers forget about their layaway products. When this happens, the product usually goes back out on the shelves. For the customer this is wasted money, for you, it is extra profit. For example, you are selling a computer for $300 and the customer puts $50 down, but never buys the rest of it, you can put that computer back on the shelf. You sell it two weeks later for $300 and you have made $350 in total.
If you have ten customers, who all put $50 down on products they never purchase off layaway, you make $500.

The Layaway Agreement

To protect yourself when items sit on layaway, un-purchased, you need a layaway agreement. A layaway agreement will help you put products back on the shelf, legally, rather than allowing them to sit in the back collecting dust. You may get the deposit but the deposit is only a fraction of what you could make if you sell the product. There are several items that you should have in a layaway agreement.

You can choose not to have a layaway program, but a better option is to reserve it for regular customers who you know will buy the product. Another alternative is to enforce a policy of 50 percent down on the product. You should also require that the product be bought within 30 days after it has been put on layaway. If the customer cannot purchase the item within 30 days of putting 50 percent down on it, then it is a product they should probably wait on buying anyways. Also, make sure customers know that if they don’t pick up the product by the agreed upon expiry date, they lose their deposit.

Having a product on layaway can be good for you but you need to have some rules in place to ensure you donít get a lot of products that are never bought and not sitting on your shelves. Layaway agreements are also good for your customer because then they know exactly what they are getting into and there are no surprises. They sign the layaway agreement knowing that they are reserving a product and that they have a set amount of time to buy that product.