Retailers had almost completely done away with the layaway plans at their stores. Opting rather for the consumers to use their credit cards for purchases and take those purchases home with them instead of the retailers having to find backroom storage for layaway items. The bad economy and tightening credit has caused a consumer demand for layaway, and retailers are listening. Layaway is making a comeback.
The idea of layaway originated during the Great Depression as a way for cash poor consumers to buy items. Now, almost 80 years later, our country is struggling with similar financial issues. Once again consumers are cash poor with the added factor of maxed out credit cards.
There have been a few retailers that have held onto their layaway plans over the years, K-Mart, Sears, some jewelry stores and a few other retailers. Consumer demand for layaway is changing that, more and more retailers are offering layaway, and it’s a win-win situation for both consumers and retailers.
Retailers are attempting to entice consumers to purchase items in their stores by pulling every trick in the book, layaway is a trick that is currently working. Layaway allows consumers to purchase what they need and/or want without taking a big bite out of their wallets all at once or adding more charges on their credit cards. Retailers offering layaway allow consumers to choose their items, make a small down payment on the total, usually around 10%, then the retailers store the items while consumers make weekly payments until the items are fully paid for.
The current retailers that are offering layaway are the ones that primarily generate their revenue from the low to middle class income level of consumers. Upscale department stores like Macy’s and Dillard’s, who model their business after credit cards, and whose merchandise and prices cater to the upper income level consumer, are not currently offering layaway.
Big box retailer, Wal-Mart, ended it’s layaway plan a few years ago and is not currently offering layaway, even though consumer demand from Wal-Mart’s primary customers is high. Wal-Mart is trying to elicit consumer spending money with online shopping, gift cards and no-fee credit cards, rather than offer layaway.
Some retailers think the consumer demand for layaway will wan after the Christmas shopping season. Perhaps. But there is always another shopping season, like spring/summer, around the corner. If the seasonal corner does not bring with it a better economy, consumer demand will for layaway will still be going strong, as will the retailers that are wise enough to offer layaway.