Lindsay wants stores to post layaway fees

A Suffolk lawmaker wants to take the surprise out of retail layaways, introducing a bill that would force stores to prominently post their associated fees.

Presiding Officer William Lindsay (D-Holbrook) said he was prompted by reports that many stores' revived layaway programs charged fees heftier than the highest credit-card interest rates.

"It needs to be crystal clear to people, when they sign up, what they're getting into," he said Tuesday.

The proposal, which will be discussed at a Feb. 7 public hearing, follows Sen. Charles Schumer's calls in November for retailers to be "forthright" about layaway fees. Schumer (D-N.Y.) cited a $69 Elmo doll requiring a $5 layaway fee and 10-percent down payment.

If Suffolk's law passes, retailers would need to prominently post a sign -- in large capital letters -- listing their layaway service fee, down payment, cancellation fee and the equivalent credit-card annual percentage rate for purchases of $70, $100 and $200. Violations would carry a $250 fine.

The National Retail Federation declined to comment on Lindsay's proposal, but in its reply to Schumer, it said credit APR isn't applicable to layaways.

Federation president Matthew Shay wrote Schumer: "There may be a modest fee to initiate this service , but to the best of our knowledge, the fee is flat and does not vary with the price of goods or the length of time involved -- two components of a typical credit transaction."

Representatives of Walmart and Sears, two large retailers that offer layaways, didn't respond to requests for comment Tuesday.

But Schumer credited Lindsay for helping consumers "make informed decisions."

"Suffolk County often leads the way locally on consumer protection issues," Schumer said in a statement. "If retailers want to offer layaway programs and charge sky-high fees for doing so, the least they can do is be forthright about the costs."