It pays to lay off the layaway

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In addition, you have the problem of impulse buys. Retailers' goal often is to generate traffic in stores because they know consumers will make unplanned purchases. If you impulsively buy several items during your trips to pay layaway installments, you haven't done your wallet any favors.

Yet another issue is a minimum purchase requirement to use layaway. If a store has a $50 minimum for layaway and you only want to buy a $40 toy, what are the chances you'll put something else you don't need on layaway to reach that threshold?

Finally, if a store goes out of business, you might not get the layaway merchandise or your money back.

"I can lock in a price." If you see an excellent price on an item you know for sure you want, it could pay to use layaway. But locking in has evil flip sides.

If you cancel your layaway — or it's canceled for you because you're late with a payment — you'll probably have to pay another fee. In that situation, you've paid fees for no merchandise at all. "If you cancel layaway, you lose by not only losing the initiation fee but also a cancellation fee," Woroch said.

Just as problematic is that many of the best price deals come on Black Friday or Cyber Monday or in the weeks immediately leading up to Christmas. If you locked in a price in October, you lose out on those opportunities or will have to pay a cancellation fee to abort your layaway agreement.

Some layaway plans will, for a limited time, adjust the price to a sale price but often exclude Black Friday. "We see every year a pattern of retailers offering even better discounts in December," Woroch said. "You're really missing out."

"I don't have the discipline to save on my own." If you have the discipline to set up a layaway plan, make a down payment, pay fees and repeatedly return to a store to make layaway payments, it seems you would have the discipline to take that same money and stuff it in a savings envelope.

"I use layaway to hide gifts from my snooping children." This could be a good reason, but realize you're essentially paying a retailer for storage if you pay layaway fees. You could lock smaller gifts in your car trunk free.

"I use layaway to buy hot toys and scarce items." This is perhaps the one slam-dunk good reason to use layaway. However, few items are truly scarce these days, especially with wide availability at online stores. And if you pay layaway fees, you're essentially paying a premium for the assurance you'll have that item at holiday time. That might be worth it to you.

Kmart offers layaway because it has received "years of positive feedback," said Tom Aiello, spokesman for Sears Holdings, which also operates Kmart. "The main point is really about giving customers many purchase options, so they can get the one that's right for them — cash, layaway, credit or other financing options," he said.

However, the purchase option that's right for customers who are spending smart — for monetary and nonmonetary reasons — is not layaway.

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