The cruddy economy seems to be killing off businesses and jobs like they’re going out of style. However, it seems to have zombified a service whose popularity peaked in the 1950s: the layaway plan.
When purchasing something on a layaway plan, the store holds the item while you pay it off in installments. After you pay off the balance, as well as a small fee, you’re allowed to take it home. This service enables people to make payments on an item without accruing the interest one would with a credit card. Plus, if you decide you can’t afford payments, you can get any money back you have paid toward the item, minus a small fee.
Many thought layaways were finished when Wal-Mart dropped the program in 2006. Until the recent crisis, Kmart was the only major retail chain that still used the plan. With many stores offering credit cards to anyone with a pulse, as well as the availability of credit in general, fiscal responsibility was thrown to the wayside in place of instant gratification.
But with the faltering economy, coupling a restriction of credit with a bleak economic horizon, layaways offer a way for stores and consumers to win (or at least not lose quite as much). Consumers win because they can make payments on items without having to take on debt, and stores win because they can actually sell merchandise in this slow economy.
Retailers like Burlington Coat Factory and TJ Maxx advertised layaway programs over the holiday season, but it is too early to know the extent to which consumers utilized the service. However, sites like elayaway.com have claimed their business has doubled compared to last year.
With the economy the way it is, are layaway programs something you would want to use, or is half the fun of making a big purchase getting it right away? What retailers would you like to see implement this program? Let me know.
–Cody
The photo is taken from this photostream and used with permission of a Creative Commons license.
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