Layaway is a time-honored method of buying merchandise on an installment plan -- except you pay now and get the goods later.

The woman who covets that new winter coat in the store window but is short of cash and carries no credit cards can make a down payment on the coat. The merchant holds it for her. When she finishes making her payments, usually over a period of 30 to 90 days, the coat is hers.

The convenience of layaway has made it a popular form of purchase among many shoppers in the District. It also has enabled merchants to attract customers whose lack of funds or credit ratings might otherwise prevent them from buying.

Despite the simple logic of the layaway system and the advantages it can hold for seller and buyer, it has been the source of several complaints by unhappy customers to the D.C. Office of Consumer Protection.

Ethiopia Liggins, spokesperson for the consumer protection office, said most complaints have been from customers who were unable to get refunds on canceled orders, were billed for hidden charges, had their payment schedules accelerated or did not receive the right merchandise.

The District has a new law now that should alleviate some of these problems by regulating layaway practices.

Before the law became effective Oct. 5, layaway policies varied from store to store, even from salesperson to salesperson. They ranged from written contracts to casual agreements that spawned confusion and, on occasion, abuses.

One man learned he was being transferred overseas a few weeks after making a $400 deposit on stereo equipment at a Northwest store. When he tried to get his money back, the store refused to give it to him. The customer complained to the consumer protection office, which negotiated a partial refund, but he was still expected to forfeit $100. Under the new law, he would pay a cancellation of no more than $16.

The layaway law is designed to prevent abuses by sellers -- and buyers. Basically it requires a statement in writing of the conditions surrounding a purchase.

An agreement must state how many and on what dates payments must be made, the store's policy on late fees (not to exceed a dollar) and on refunds (whether they are made in cash or credit). It must describe the ordered merchandise and include a promise that the merchandise will be provided within 14 days after the last payment has been made.

If you cancel your order within the first 14 days, you're entitled to a full refund. And if the store cannot provide your merchandise after you've made all the payments, you get a full refund, plus 8 percent or $16, whichever is less.

The law affords protection to the merchant against late-paying or indecisive customers who tie up stock, only to default on their orders days or weeks later. If you cancel after 14 days, you'll get a refund but the store may keep 8 percent of the purchase price or $16, whichever is less.

The store must send you a notice of delinquency if you get behind in your scheduled payments. If you don't pay up within two weeks after the store sends the notice, the store can refund your money, nomus a late fee, and cancel the agreement.

If your neighborhood store is not in compliance with the new law, it may be that word hasn't spread there yet. Despite notices sent out by the District government, the consumer protection office says it can take several months to educate the public about new regulations.

(Of 16 clothing and furniture stores called at random in various sections of the city, seven reported they were unfamiliar with the law. One shopkeeper, who had heard about the law "quite accidentally" from another merchant, said she believed "a lot of merchants do not know about it.")

If questions or problems with layaway plans arise, consumers can call the D.C. Consumer Protection Office, which is responsible for enforcement of the laws, at 727-1308.

But aside from legal rights, perhaps the consumer's best insurance against aggravation is his or her own common sense. Is the store you're dealing with reputable? Can you afford to make the payments -- on time? Do you really need that green and orange sport coat? Think it over.