Layaway plans making a comeback for holiday shopping season
Nostalgic shoppers are more likely to find something in stores this holiday season that hasn’t been widely available for a long time — layaway programs. Driven by the credit crunch and sagging economy, Toys R Us has joined a growing list of retailers reviving the once-popular payment plan in an effort to boost sales.
Introduced Monday by the nation’s largest toy retailer, the program will allow shoppers to finance a variety of big-ticket items such as bikes and cribs without accruing any interest charges. After making a 20 percent deposit and paying a $10 service charge, customers can work off the balance through in-store payments. To bring the items home in time for the holidays, payments must be completed by Dec. 6, with a $5 fee for any canceled orders.
“I’m surprised we haven’t seen more companies announce layaways at this point,” said Ellen Davis, vice president of the National Retail Federation. “In an economy like this, many people like the idea of buying ahead of time, even if they can’t pay for it in cash, without having to deal with a massive credit card bill in January.”
A mainstay for much of the last century, layaways fell out of favor during the 1990s, after easy credit and a booming economy made the practice irrelevant to many consumers, prompting Sears and a number of other major retailers to discontinue their programs. Wal-Mart ended layaway several years ago but does offer the option for fine jewelry, a spokeswoman said.
Last fall, as the economy sank to depths not plumbed since the Great Depression, Sears brought its layaway program out of mothballs, heralding its unlikely revival.
“It’s working well for us,” said Shannelle Armstrong, a Sears spokeswoman. “It definitely contributed significantly to our holiday sales in 2008.”
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