Layaway still popular with shoppers
Erin McKeon | thefacts.com | Tuesday December 4, 2009
Purchase now, pay later applies not only to credit cards, but also to placing items on layaway to spread out payments, keep kids from snooping around or make sure shoppers get the exact thing they want before it leaves the store in someone else’s bag.
“I budget out what I’m going to spend for gifts and it helps me to be able to pay it every two weeks or something like that so it’s not just one chunk of money at a time,” 62-year-old Lake Jackson resident Chris Barlow said.
“I’ve always done that, and I feel it’s a smart way to shop.”
Barlow shops at many local stores, but is a frequent layaway customer at Forever Treasures in Lake Jackson, where more than 200 customers in the past few months put items on layaway for as long as three months, with frequent payments.
“It’s always been our policy to do layaways because it enables customers to spread out the payments and catch those things they really desire before they’re no longer available,” Forever Treasures owner Maria Atkins said. “It opens up the opportunity for folks to purchase something in advance and not only get what they really want, but also to be able to spread it out up to three months.”
Making sure she can afford to buy the items she wants, while not going over her budget, is exactly what keeps Barlow using layaway, she said.
“Maria will have things that I know if I don’t put in layaway, I know she won’t have them later for me to wear to a Christmas party or something,” Barlow said.
Barbara Christ, 55, of Lake Jackson would rather pay off expensive items over time than put it on a credit card or go over her budget, she said.
“Most of the time, I could’ve paid for it right then, but I think it helps you not have to take it out somewhere like savings or a credit card,” Christ said. “I’m not really into credit cards at all, and my husband really isn’t either.”
LAYAWAY AVAILABLE
At Kmart and Sears, customers can place items on layaway in-store and online, allowing them to shop for the holidays more easily without putting out a lot of money at one time, a spokeswoman said.
“Layaway is not only a great way to start shopping early and find great selections at Kmart; it also allows customers to spread their payments over time and better plan their spending,” said Mary Snyder, Kmart’s chief marketing officer. “The program allows consumers to make bi-weekly payments over the course of eight weeks.”
Toys R Us recently announced it would bring back layaway on more expensive items such as bikes and cribs, and recently announced its “Big Gift” layaway program now will include video game hardware.
At Toys R Us, customers must deposit 20 percent of the console’s total purchase, including tax, and a $10 service charge. Payments can be made at the store in cash, check or credit card.
Business has reportedly doubled this year at eLayaway, a company that administers layaway programs for 700 online merchants, including Home Depot and Best Buy.
The company charges a 1.9 percent transaction fee, which can be paid in the first payment, with an average layaway transaction taking six to eight months.
Cancellations are subject to a $25 fee, or 10 percent of the total amount collected — whichever is lower.
Burlington Coat Factory’s layaway program gives customers eight weeks to complete a transaction, with a 20 percent deposit and a $5 service fee. Canceled orders are subject to a $5 fee, with the deposit and service fee also usually forfeited.
Foot Locker offers 30-day layaway at some of its locations and shoppers must put 20 percent down and pay a $5 layaway fee. Marshalls has a policy of customers putting 10 percent down, paying a $5 fee and having 30 days to pay off the purchase.
Walmart is among the stores that discontinued their layaway program years ago because they were losing money and it affected the store’s low-price pledge, spokeswoman Anna Taylor said.
“Traditional layaway programs are expensive — and costs are ultimately factored into the cost of products,” Taylor said. “The best way for Walmart to help customers this Christmas is to keep our prices as low as they can go.”
