It must be a sign of the times. This year I’ve seen at least one commercial advertising a retailer’s layaway plan. These have been out of style for at least as long as I’ve been an adult consumer. The theory is that rather than paying up front for a large item, a Christmas gift for example, with cash, you can offer the store a deposit and the store will hold the item for you.
Every week, you can continue making payments until the item is paid in full; at this point, you can take the purchase home. There may be a small fee to participate in a layaway program, but the store does not charge interest. As Kimberly Palmer from US News & World Report notes, if your layaway purchase is a holiday present for your children, having the store hold the gift while you make your payments would make it more difficult for the intended recipients to discover their hidden present.
Layaway seems to be a reasonable solution for making large purchases without credit cards. The fees are low and customers won’t get trapped into debt. In a retail environment when supplies of the most popular items can’t match demand, it’s an advantage to have the ability to reserve your purchase ahead of time while you pay over time.
Not every retailer thinks this is a profitable plan. Wal-Mart and a few other stores refuse to participate in layaway programs. If you plan on shopping at K-Mart, TJ-Maxx, or Marshall’s, layaway programs will be available.
Layaway Programs Come Back Into Style, Kimberly Palmer, US News & World Report, October 28, 2008
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