Walmart does away with layaway, which didn't carry any fees, and announces new buy now, pay later program that will charge customers interest

Regina Tommy, Walmart cashier, waits for customers. Jonathan Newton / The Washington Post via Getty Images
Walmart decided to end layaway before the 2021 holiday seasons.

The retailer announced that it will use Affirm, a buy-now, pay-later service, which the company partnered with in 2019.

Walmart began to phase out its layaway last year and only allowed it for certain jewelry purchases.

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Walmart will end its layaway program before the 2021 holiday season and replace it with a buy-now, pay later financing option.

To replace layaway, the retailer now uses Affirm, a company that partnered with Walmart in 2019. Instead of having items held in stores from late August to mid-December while customers pay the full amount, shoppers can now pick up the item and pay with Affirm.

Affirm purchases can accrue interest over time, unlike layaway. Affirm doesn't charge hidden fees or late fees, but customers can get an APR rate of 10-30% on purchases depending on their credit score and 0% on select promotional items at Walmart.com.

Affirm may not be available to all Walmart customers, depending on whether they are prequalified. You can use the service on purchases between $144 and $2,000, but it does not include alcohol, groceries, food, or personal care products.

Walmart, the largest retailer in the world, began to eliminate layaway last year. It offered it only on select jewelry items.

Walmart spokesperson said that they have learned a lot over the past year, as customers' shopping habits and needs have changed. Our payment options offer the best solutions for our customers, and we are confident about that."

Affirm's services work in a similar way to credit cards. Customers can purchase the item right away and then pay the item over a period of three to 24 months. Customers have the option to choose their payment plan. Affirm will match them up with a lender and provide a loan to finance the item.

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Walmart customers can return all purchases made through Affirm for a refund. However, the interest they have paid will not be refunded. According to Affirm, late or partial payments can impact a consumer’s credit score and ability to get new loans from the company.

Walmart customers expressed concern via social media about their families' ability to buy gifts for the holidays if they aren't eligible for Affirm.

-THEE STEP MUVA (@Stepmuvalex) September 25, 2021

One Twitter user said that Walmart had removed layaway and replaced it by Affirm which checks credit just before Christmas. "Many low-income families won't be able give gifts to their children," one Twitter user wrote.

Some customers didn't mind the change and joked that they don't have a place to store their gifts during holidays without layaway.

Walmart recently made several changes across the company, including increasing its minimum wage and eliminating its hourly bonus program. Additionally, Ghost Kitchens were opened in select stores.

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