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.
Reader Comments (Page 1 of 5)
11-13-2008 @ 8:54PM
Meash said...
I don't know where the person who wrote this article shops, or got their information, but all of the TJ Maxx stores in my area have recently DIScontinued layaway, not re-introduced it. This is disappointing to me, as I used it often.
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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.....
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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".
11-18-2008 @ 12:10PM
John H. Ryan said...
Lay-a-way sounds great and in the depression era - 20's & 30's - did help many people to save and bye presents for their children. But it all hinged on the full faith and credit of the store taking your money - Just think - a store offers lay a way - and just before Christmas - goes bankrupt - poof - chapter 7 - gone -and so is your money. And that is the down side risk. Why not just open a savings account at a local bank and put your money in the account and it will be available to you when u want it. That way you can sleep at night and not worry.
Jack Ryan
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11-13-2008 @ 6:15PM
Paula said...
John, they're "christmas club accounts" but with the economy the way it is and so many banks going the same way as department stores, I'd just as soon keep my money under my mattress.
11-15-2008 @ 7:54AM
phil said...
Because layaway is about getting something while it is still available, even though you don't have the money (or perhaps the credit) to buy it at the moment. You walk into a store, see the last Wii set in the store on sale half price, but you only have twenty dollars in your wallet. Do you leave the store to go get some money assuming it will still be there when you get back? That's called Layaway.
11-16-2008 @ 11:58PM
Tom said...
They used to have a thing called a "Christmas Club" at the local bank. One would put so much a week into the club (set payments about $5 or $10 back then) and the bank would put in an extra payment as an inticement.
Instant gratification is the downfall of this country. Faster, newer, even if you can't pay for it. It's a micro and macro economic problem.
11-13-2008 @ 2:30PM
tmercks said...
Now everyone can shop like us ol' rednecks do.
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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.
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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'.
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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.
11-14-2008 @ 11:25PM
bonnie said...
It sucks that wal-mart dont have lay-a-way anymore. They do have a better cloice than k-mart and sears. But when u got 4 children to buy christmas for lay-a-way helps so ill be goin to k-mart and sears.. As a single mother you gotta do whats best that fits into your budget.. And christas dont fit in but it has to..
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11-13-2008 @ 3:50PM
kaskel said...
I will be doing all my Christmas shopping at Kmart and Sears this year
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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!!!!
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