Sears (re)joins the layaway revival
Filed under: Budgets, Shopping, Recession
Where Layaway Reigns
Sears did away with layaway nearly twenty years ago (at least for most products except fine jewelry), but now is jumping back on the bandwagon as of Sunday. Except for major appliances and home electronics (like that flat-screen you can't afford), customers will be able to put money down on an item to retrieve later, for just a low fee but no interest.
Michael Dwyer, AP
K-Mart got back on the layaway bandwagon in mid-October, and has been touting its revival in ads that encourage shoppers to come and shop early for holiday wares.
Mark Humphrey, AP
Monroe Milstein, founder, CEO and president of Burlington Coat Factory, has long had a layaway program, which is 30 days for regular merchandise and 90 days for Baby Depot items. There is a $5.00 service fee.
Daniel Hulshizer, AP
TJ Maxx has also had a layaway program all along, which requires 10 percent down and pick-up with full payment within 30 days. No fee is specified on the company's Web site.
Elise Amendola, AP
Marshalls, owned by the same parent company as TJ Maxx, has a similar layaway policy.
Paul Sakuma, AP
The Web has also taken to layaway, as services like eLayaway.com offer the ability to use a third-party service for layaway-type purchases.
eLayaway.com
Wal-Mart used to have a robust layaway service, but did away with it in 2006 and has yet to revive it. Other retailers, like Circuit City and JC Penney, also discontinued their programs.
Paul Sakuma, AP
Target never got on the layaway bandwagon at all, and has made no indication that it plans to hop aboard anytime soon.
Tony Gutierrez, AP
Sears never fully left layaway completely -- it has been offering it for fine jewelry since 1989 -- but now it will be there for customers who want anything but home appliances and home electronics.
Why is Sears back in the layaway game? Have you seen the stock market ticker lately? As the economy sours and consumer dollars stay in their wallets, Sears is jumping on the return to layaway bandwagon with K-Mart, Burlington Coat Factory, Marshall's and TJ Maxx. Yet to return to layaway this holiday season: Toys 'R Us, Wal-Mart, Target and JC Penney.
WalletPop named layaway one of the most underrated things in America in a recent series, and also labeled it, "the new black."Not surprisingly, layaway had its heyday in the financial crisis of the '20s and '30s. Easy credit and the proliferation of credit cards in the 1970's led many retailers to discontinue the program. The notion of paying for something BEFORE you get to have it lost its credibility for many Americans. Layaway carried the aroma of poor credit and bargain-bin shoppers. It's a surprisingly emotional topic, stirring up memories of poor, hardworking parents who are struggling to afford nice things for their families.
This is what one of WalletPop's readers, Lynn, had to say about it: "When I was growing up I would have had no Christmas gifts if my mom did not have Layaway available to her. And she taught me that it was a good way to buy for my own kids. Now my children are young adults and will be having children of their own and I hope this comes back so it will be available to them. It is a MUCH better way to buy than credit cards!!"
Layaway doesn't incline people to impulse purchases since by definition you can't take it with you. Although policy varies from store to store, there is usually a small flat service fee ($5-$10) and a cancellation fee in the same range which is returned when payment is completed. Some stores require 20% down. One good thing is that customers paying on layaway don't wind up paying interest a decade after their purchase has taken up residence in the landfill.
Like many of the adjustments the recession is causing in our lifestyles, layaway reflects a return to old values. It could turn out to be a very good thing.
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Reader Comments (Page 1 of 5)
11-13-2008 @ 2:26PM
Debi said...
I think layaway is a wonderful thing, I myself will buy more items, if I can pay over time, rather than pay now, and without interest....Its actually a wonderful concept.....
Reply
11-13-2008 @ 6:08PM
joncdodge said...
This is cool, I am shopping online and found a cool site for
Three Top Coupon Websites
http://www.curiousread.com/2008/08/three-top-coupon-websites.html
Happy Shopping!
11-16-2008 @ 9:13PM
Jo said...
I would have received nothing for my birthday (days before Christmas) or for Christmas if it wasn't for lay away. I am fortunate to make a decent living but I still do lay away at Kmart & WalMart because I love not having to hide stuff. I get the stuff a week prior, go to my friends, we have a wrapping party and go put the presents under the tree. Of course we keep some in hiding for "Santa".
11-13-2008 @ 2:30PM
tmercks said...
Now everyone can shop like us ol' rednecks do.
Reply
11-13-2008 @ 2:35PM
Diane Molinari said...
I WILL SHOP AT ONLY SEARS,KMART AND TRACTOR SUPPLY BECAUSE OF LAYAWAY!!YOU MIGHT NOT REALIZE IT BUT TRACTOR SUPPLY HAS THINGS FOR YOUR HOME,CLOTHING,PETS, ETC. NOT JUST THINGS FOR FARMING-I AM ONLY TELLING YOU THIS FOR CHRISTMAS SHOPPING IDEAS ,I DO NOT WORK FOR THEM-BUT SAY GOODBYE WALMART !!
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11-13-2008 @ 2:43PM
shopquestion said...
I was not aware that Walmart did away with their layaway program...Where I live, in Florida, they still offered it to customers as of last Christmas. When did this change take place? thank you.
11-16-2008 @ 3:11PM
Dennis said...
In the midwest, we have Farm & Fleets which is a nice store. I get my jeans and tools there all the time.
11-13-2008 @ 2:39PM
laurie said...
Layaway is the greatest.My mom used it when we were little for Christmas gifts and school clothes.When I got my own apartment,I used it for everything from clothes to silverware.Now I have my own son and still use it.It's a cheap easy way to get what you want without taking a chunk out of your budget.I've had Christmas presents and clothes on layaway since October.I don't need to go out shopping at all now and only have to drop in the store for 5 minutes,every 2 weeks to make a payment.I use it all yr long.The 1st yr I moved to Florida,I went right to the store and made a hurricane layaway,getting a cookstove,lanterns,tarps,candles and dozens of packs of batteries.I could never afford to take a whole paycheck and spend it on a shopping trip,but spreading out payments,I can still get my sons' "wish list" and not go broke.Some people may look down on it,thinking it's for poor people,but that's not the case at all.In this economy,it's for SMART people.
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11-13-2008 @ 2:46PM
Pinkyfinger said...
I personally love lay-a-way. Too bad Wal-Mart took it away, I'd shop there more often. I'm thinking their heads got too big for themselves.
Reply
11-13-2008 @ 5:17PM
JACK said...
The reason most business's did away with layaway's is very simple. Companies lose an enormous amount of money providing this service and are forced to raise prices on their merchandise for everyone else to compensate. 60 % of layaways that are put in are never picked-up. This merchandise sits in a room for 30-60 days and when it is put back on the floor, most of the items go to clearance because they have been in the store for such a long time, even though the items were not offered to other customers at full retail. Of the 40 % who do take their layaways home, it is often only a small amount of what they had placed in it. An enormous amount of the items are deleted/canceled and they only decide to take a few things. The labor is extensive. An associate does the original layaway, layaway audits need to be done weekly, and associates must re-stock unclaimed layaways and canceled layaways. Here is an idea!!!!!!!! If you can't get credit or don't want to use a credit card, save cash at your house or bank each week and then pay cash for the items at the end of the month.!!!!
11-13-2008 @ 3:14PM
Karen said...
Walmart really messed up when they quit doing layaway.
There are alot of low income families that depend on this.
I am so glad that these other stores have brought it back.
Walmart is just not the same since Sam Walton died. Now , all they have is the little greedy money hungry execs'.
Reply
11-16-2008 @ 9:05PM
Deb said...
Walmart did away with layaway because they were losing money. People wouldn't pay for their items and trucks beds were filled at Christmas with layaway. I hated to see the layaway program leave Walmart, since I used it too.
11-13-2008 @ 3:50PM
kaskel said...
I will be doing all my Christmas shopping at Kmart and Sears this year
Reply
11-13-2008 @ 3:53PM
Beth said...
In 1978, I used my paycheck from my first job (part-time during college) to buy a set of luggage from Sears through layaway. It took me about five months to pay it off, but I used it for almost twenty years. I'm glad layaway is back, and I wouldn't be surprised if I start using it again. It's the next best thing to a debit card. PEOPLE PLEASE: CUT UP YOUR CREDIT CARDS!!!!
Reply
11-13-2008 @ 5:58PM
BumbleBee said...
I sue my credit cards daily, but I rarely charge more than I can pay every month. for me it is a way of keeping track of my spending. Also, that once in a while big item, that I may take a few months to pay off.
Credit is not bad, abusing credit is bad!
There was a time though I could not live with out layaway...when my kids were small.
11-13-2008 @ 4:06PM
Chris said...
Layaway is coming back to be more popular because the credit market is tight and they know most people now are not placing items on their credit or cannot get a credit card at all. When you place an item on layaway you still fill and sense of entitlement that you will eventually get that item out and so you pull money aside to pay for your item every pay day until you go and get it. Credit card is just instant gratification until you get the bill. I actually get excited when I have paid for an item and go and pick it up on layaway. Walmart jumped on that bandwagon when everyone including your pet could get a credit card. The company benefits as well because it some people do not come and get their items they pocket the money that people have already put down. I may need to go and check Sears out this Xmas.
Reply
11-13-2008 @ 4:44PM
Julie said...
KMart has never gotten off the "bandwagon." We have never closed out our layaway services. Heck, how do you think we employees hide our Christmas shopping??
Reply
11-13-2008 @ 4:49PM
Amber said...
"The Buckle" offers layaway as well! This is a great store but a little pricey so the layaway option is perfect!
Reply
11-13-2008 @ 5:03PM
Rooney said...
I shop at Sears as often as possible because they are in the minority of companies that pay their employees, who are members of the National Guard or Reserves, the difference between their military pay and their Sears pay for the duration of deployment or full-time training. For those who are unaware, our Soliders are not paid very well for the courageous job they have voluntarily signed up to do and deployment can be a real financial hardship for many families. I support Sears because Sears supports our troops.
Reply
11-13-2008 @ 5:22PM
Kristine said...
I work at Kmart in NJ, and we have always done layaway. There are four other kmarts in the area and our's is the only one with layaway left. It's not even december yet and our store has over 80,000.00 worth of merchandise on layaway from customers coming in. If that isn't a sign of the economy I don't know what it is. It is better than a credit card, because the only fee you will ever get charged is the $5.00 for starting the layaway. Look at it as a small holding fee. Than you pay until you get the call to pick it up. However, if you cancel the layaway or it gets returned to stock for non-payment than you lose your five dollars plus ten dollars, which is all in the contract. I mean it is one fee of $5.00 dollars not a monthly finance charge like credit cards. The story with the wal-mart around the corner from us is that they were storing customer's layaways in lock semi trucks out back. This was a violation of the town and they had to remove the trucks. Since there was no where to store the layaways they did away with program...this happened at the end of last christmas by me. I am not sure if this is what happened across the nation, but rest assured Kmart stores their layaways inside their building. And Sears, since Kmart purchased them, yes that is right, has brought back layaway....I wonder why :) Keep it in the company...
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