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What is Walmart's buy now, pay later program? Why is the layaway program discarded?

Walmart makes changes to programs that allowed customers to delay payments on larger purchases. Our team took a look at the possible impacts.

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What is Walmart's buy now, pay later program? Why is the layaway program discarded?

Walmart has gone away with its "Layaway" program that had allowed customers to make payments on purchases over an extended period of time. However, Layaway fans should not worry because the company announced a replacement program called, Buy now, Pay later. 

Many are still wondering: will the new program offer the same benefits?

What are the differences between the programs?

Walmart is advertising the new program as an improvement over Layaway.

What types of products can be paid for with Affirm?

What types of products can be paid for with Affirm?

There are thirteen eligible item groups that Affirm can be used to cover:

  • Electronics
  • Video Games
  • Toys
  • Home
  • Arts & Crafts
  • Musical Instruments
  • Home Improvement
  • Auto
  • Sports & Outdoors
  • Tools
  • Baby
  • Jewelry
  • Apparel

On their website, the company states, "alternative to layaway, you can purchase immediately and pay over time at a pace you choose—from 3 to 24 months."

Is Buy Now, Pay Later a credit card?

The program sits in an awkward place between a credit card and a store credit system. The program is made possible through a collaboration with Affirm. Affirm is a credit card company that claims to be on the side of the consumer to prevent the accumulation of debt.

However, through their collaboration with Walmart, they are offering consumers a loan, rather than a credit card. To be able to use Affirm, customers must apply, which Walmart makes clear will not impact one's credit score. During the application process, Affirm will let you know if you qualify for the promotion "0% APR." However, consumers should be warned that many may see an APR between 10-30%.

This means that your purchases using Affirm will accumulate interest, which you will be on the hook to cover in addition to the principal. Affirm can only be used on purchases between $144-$2,000.

If you choose Affirm at checkout, the company will match you with a lender willing to cover the price of the purchase. To assure customers, Walmart highlighted that when paying, one will see the "total amount of interest you will pay, never charging you anything extra."

Failures to pay off the loans in the time determined by Affirm could negatively impact a customer's credit.

How have customers responded?

While the company claims they believe the new program will better meet the needs of their customers, some are not happy with the decision. The layaway program did not require a credit check, so many think that they could lose access to the benefit. Some disgruntled customers took so social media, bashing the company for making the decision so close to the holiday season.