Web Site Offers Layaway Plans to Shoppers
KOMO Staff Writer | November 30, 2007
Disappointed by vanishing layaway policies at many retailers, consumers now have an online option: eLayaway.
eLayaway™ allows people to pay over time before they take delivery of goods and services.
"Unfortunately, you can't blame merchants for what has happened with layaway policies," Sergio Pinon, CEO and co-founder of the Florida-based eLayaway.com, said in a telephone interview.
"Layaways have become unmanageable to many merchants. For example, if you buy a stroller and put it on layaway, the real estate the stroller takes up is expensive -- more than what the consumer will pay for the stroller.
"Add to that, you have to hire staff to monitor the layaway merchandise, and customers often abandon items they put in layaway.
Wal-Mart ceased its layaway program last year. Company officials cited decreasing demand for the program and increasing costs.
"Demand for layaway service has declined steadily as consumers turn to other options, such as online shipping, gift cards and no-cost credit alternatives," Wal-Mart executive vice president of operations Pat Curran said in a news release.
Kmart, KB Toys and T.J. Maxx continue to offer layaway programs to customers. Sears, JCPenney, Belk, Dillard's, Target, Kohl's, and Toys R Us do not.
Kmart spokeswoman Kim Freely said Kmart has offered its layaway program to customers for nearly 40 years.
"We see it as a value-added service. It's our mission to build long-lasting relationships with customers," Ms. Freely said. "We're proud to offer a wide variety of products to customers with very diverse needs. We're committed to the program."
Shoppers have a choice of more than 500 merchants on eLayaway.com including ShoppersChoice.com, Serta, Apple, Intel, CompUSA, mysportlocker.com and Kidz Super Store, Mr. Pinon said. And, like the traditional layaway programs, there is no credit check.
The way eLayaway™ works is simple, he said.
After you register with eLayaway™ (at no cost), you select a merchant on the Web site and view their products. Each product will have an eLayaway™ button next to it.
After you finish selecting the products you would like to purchase, you will be transported to the eLayaway™ module which allows you to choose your payment term, amount and frequency, the Web site noted.
Once you create a suitable payment plan, you will make your first payment and the check-out process is complete. The eLayaway™ system uses an automated bank-draft payment plan. On a specified date, the payment is automatically deducted from the consumer's bank account.
"We've had shoppers put a $10 bottle of cologne on layaway and pay $1 a month," Mr. Pinon said. "We think they're testing us to see how it works, because they'll come back and buy $300 worth of stuff."
The online company, launched in August 2006, has been featured recently on CNN, iVillage.co and Entrepreneur Magazine. Since then, the company has grown considerably, he said.
"We're watching the growth and ever-increasing business on our Web site," Mr. Pinon said. "We started with zero merchants and zero members. We had to go to merchants and say let us help you sell your merchandise.
"The ones who trusted technology were the ones who we got first. But, this month we'll do twice as much volume than last month, and last month, we did twice as much volume as the month before. We've got a service that people and merchants want."
Customers buying a product through eLayaway.com pay a 1.9 percent transaction fee and a $25 cancellation fee.
"If the consumer buys something for $190, they pay us $3.61," Mr. Pinon said. "The $25 cancellation fee guarantees that if they change their mind, they'll get their money back."
Mr. Pinon said many of the eLayaway™ members purchase large items ranging from high-definition television sets to laptop computers.
"When the new iMac came out, we had some of the older iMacs at the same price on layaway," he said. "Because we're proactive, we contacted the merchants, advocating on the behalf of our members, asking if our members could have the upgraded version if they wanted it. The merchants agreed."
Also, if an item goes on sale after it has been put in layaway, eLayaway™ makes sure the member gets the reduced cost.
"We take care of our members," he said.
"What's nice about eLayaway™ is the minute you get your new TV hanging on the wall, it's paid in full; you take a family trip, it's paid in full." Mr. Pinon said. "You have the gratification of knowing that you don't have the bill coming to you in the mail."
