Magento 2 Layaway: Pros & Cons Of Partial Payment Extension
Are you looking for a way to offer flexible payment options on your online store? Magento 2 Layaway provides customers with partial payment plans.
This article will cover the pros and cons of Magento 2 Layaway.
Key Takeaways
- Get an overview of using Magento 2 Partial Payment Layaway.
- Get insights into how Magento 2 supports the account section of customers.
- Explore top multiple payment layaway extensions.
- Learn the pros and cons of paying an amount later in an installment.
- Discover which layaway extension is the best for ecommerce business.
How Does Layaway Extension Work?
Layaway installment payment offers partial payment in a step-by-step order as follows:
- The customer selects the desired product using an online layaway option. He then submits it at the retailer's designated layaway processing location.
- The store verifies that the item meets the layaway eligibility criteria under its terms and conditions.
- The customer makes an electronic payment through the retailer's website. He selects a payment schedule (weekly, biweekly, bimonthly, or monthly) to pay off the remaining balance.
- The customer continues to make incremental payments until the full balance is paid. It includes any layaway fees or additional costs. The item can then be picked up at the store. It can also be delivered or picked up at a designated location.
Difference Between Layaway & Credit Cards
| Feature | Layaway | Credit Cards |
|---|---|---|
| Payment Method | Pay in installments over time | Pay the full amount upfront or within the billing cycle. |
| Interest | No interest charged | Interest charged on unpaid balances |
| Credit Check | Usually, no credit check required | Requires credit check and approval |
| Fees | May have layaway fees or service charges | Annual fees, late payment fees, etc. |
| Product Availability | Item held by the store until fully paid | Immediate access to purchased item |
| Spending Limits | Often, no preset spending limits | Limited by the credit limit |
| Budget Management | Helps customers manage their budget over time | Can lead to overspending if not managed well. |
| Impulse Buying | Tends to discourage impulse purchases | Can encourage impulse buying. |
| Customer Base | Attracts customers with limited credit or who prefer budgeting | Appeals to customers with established credit. |
| Payment Flexibility | Less flexible, fixed installment plan | More flexible payment options |
| Inventory Management | Retailer holds inventory until paid in full | Immediate inventory management turnover. |
| Customer Loyalty | Builds loyalty through commitment to purchase | Often offers reward programs for loyalty |
Pros Of Layaway Plans
1. Budget-Friendly Purchasing
Layaway allows customers to divide the total cost of an item into smaller, more manageable payments. For instance, a $500 television can be paid off in 5 monthly installments of $100 each. This method benefits customers in several ways, like:
- It aligns with paycheck cycles, simplifying budgeting.
- It lessens the immediate financial burden of a large purchase.
- It enables customers to benefit from sales or special pricing without needing the full amount upfront.
2. No Interest Charges
Unlike credit cards, layaway plans don't charge interest on the purchase price. It results in significant savings. It is beneficial for those who might otherwise carry a credit card balance.
3. Accessibility for Those with Limited Credit
Layaway doesn't require a credit check. Thus, it makes it accessible to individuals with poor credit or no credit history. This inclusivity allows more people to make purchases they might otherwise be unable to afford.
4. Secures High-Demand Items
Customers can reserve an item on layaway before peak seasons, ensuring its availability. Once an item is on layaway, the store sets it aside, guaranteeing it won't be sold to someone else.
For Example, you can better manage stock levels and predict demand based on layaway commitments.
5. Encourages Planned Spending
The waiting period between selecting an item and receiving it helps curb impulse purchases. The payment schedule helps customers visualize their financial commitments over time. Customers must carefully consider their purchase as they are committing to a payment plan. They develop the habit of setting aside money regularly for a specific goal.
Cons Of Layaway Payment Module
1. Delayed Gratification
Customers can only take possession of the item once it is fully paid off. This makes immediate needs or time-sensitive purchases difficult.
2. Potential Fees
Many layaway programs charge service fees, cancellation fees, or restocking fees. These additional costs can add up. It could make the purchase more expensive than anticipated.
3. Strict Payment Terms
Failure to meet the payment schedule may result in loss of the layaway payments made. This inflexibility can be problematic for those with irregular income.
4. Limited Selection
Not all items in a store may be eligible for layaway. It limits consumer choices. Some retailers only offer layaway during certain seasons or for specific product categories.
5. Risk of Price Changes
If an item goes on sale after being put on layaway, the price is not adjusted. This means customers might pay more than the current market price for the item.
6. Store Bankruptcy Risk
If a retailer goes bankrupt, customers may lose their purchased items and payments. However, this risk is worth considering when choosing a layaway program.
How To Choose The Right Layaway Extension?
| Consideration | Description |
|---|---|
| Features | - Customizable payment schedules - Automated payment reminders - Integration with popular payment gateways - Flexible EMI options - Customer notifications - PCI compliance |
| Price | - Compare prices across vendors (ranging from $72 to $749) - Consider your budget and required features - Look for value for money rather than just the lowest price |
| Supported Payment Gateways | - Ensure compatibility with your preferred payment methods - Common gateways: PayPal, Stripe, Authorize.net - Check for support of region-specific gateways if needed |
| Supported Product Types | - Verify support for all product types (Simple, Configurable, Bundle, Downloadable, Virtual, Group) |
| Magento Version Compatibility | - Confirm compatibility with your Magento 2 version (2.3.x, 2.4.x, etc.) |
| Customization Options | - Look for extensions offering flexible configuration options - Ability to set minimum order amounts, credit limits, etc. |
| Admin Controls | - Check for enhanced backend management features - Order management, reporting, and manual payment options |
| Customer Experience | - Evaluate the frontend user interface and ease of use - Look for clear payment schedules and information display |
| Support and Updates | - Consider the level of customer support offered - Frequency of updates and bug fixes |
| Reviews and Reputation | - Read user reviews and testimonials - Check the extension developer's reputation in the Magento community |
Top 4 Partial Payment & Layaway Extensions For Magento 2
1. Magento Partial Payment Order Extension by MageCloud
MageCloud Partial Payment Module Extension provides a simple 1-click installation. It offers a checkout option to help increase sales and improve cash flow.
Features
- Minimum cart total for checkout
- Permitted categories
- Eligible customer groups
- Excluded products
Pricing
Free
2. Magento 2 Partial Payment Extension by Meetanshi
Meetanshi Partial Payment in Magento Extension enables customizable payment plans. It allows customers to pay in installments, layaway plans, or through EMI options.
Features
- Attract a larger customer base.
- Increase sales by enhancing customer affordability.
- Compatible with Magento CE, EE 2.3.x, 2.4.x
Pricing
- Open Source (CE) Edition + Pro Installation & Configuration- $258.00
- Commerce using on-prem (EE)/Cloud (ECE) Edition+ Pro Installation & Configuration- $408.00
3. Magento 2 Partial Payment and Layaway Extension by Milople
Milople Magento 2 Partial Payment Module Extension allows you to sell products. Budget-conscious buyers who have skipped a purchase can become loyal customers.
Features
- Set a minimum order amount to enable the installment facility.
- Multiple products with partial payments can be included in the same order.
- Modify the payment plan brand label from the admin panel.
- Magento store admins can place partial payment orders directly from the Magento backend.
- Choose any image from your library and use it as a category image.
Pricing
- Magento Community Edition + PRO + Professional Installation- $148.00
- Magento Enterprise Edition + AUTO + Professional Installation- $268.00
4. Partial Payment For Magento 2 Extension by Mageworx
Mageworx Magento 2 Partial Payment Extension allows you to set affiliate marketing efforts. It uses down payments, installments, and layaway plans.
Features
- Provides multiple commission levels with automatic tier updates.
- Uses coupon codes and referral links.
- Manage payouts and withdrawal limits with ease.
- Send automatic notifications to admins.
- Set expiration times to track orders.
- Export affiliate data into a CSV file for analysis and records.
Pricing
$149.00
FAQs
1. How does the Layaway Extension allow customers to split payments?
Product-specific Partial Payment allows customers to buy products in installments. It pays a down payment at the time of purchase. Also, it sets the payment amount later in installments.
2. Can store owners configure the number of installments?
Yes, the facility of partial payment extension sets the number of installments. It also customizes the payment calculation for each product.
3. Where can customers see partial payment options?
Partial payment details are visible on both the cart page and the product page. It allows customers to choose their preferred payment category.
4. How does the Payment Calculation Box work?
The Payment Calculation Box shows customers the breakdown of their installments for the products. Set the down payment and pay the remaining amount in installments.
5. Can store owners set a maximum partial payment credit limit?
Yes, you can set a maximum partial payment facility. Manage risk and control the amount of credit extended to customers.
6. Does the extension support full payment alongside partial payment options?
Yes. Customers can choose between full payment and partial payment based on their preferences. Opt for the partial payment extension and manage the price of the product.
7. How does the extension help manage partial payment orders?
EMI Extension manages partial payments applied within your Magento 2 store. It tracks the deposit amount and the remaining amount later in installments.
Summary
Magento 2 Layaway offers EMI payment options to buyers to pay in installments. It helps you to:
- Pay the full amount using the** partial payment availability message**.
- Track and manage layaway orders efficiently.
- Pay down payment using remaining installments.
- Provide partial payments and installment plans.
- Improve the overall shopping experience.
Consider managed Magento hosting to allow buyers to manage EMI on the Magento 2 website.
