Rediscover Layaway at Kmart

"Buy Now, pay later!"

And so we have, from swiping our cards for $1.39 to buy coffee at the Wawa to taking out monsterous sub-prime mortgages for houses we could not afford, creating a financial tsunami that now threatens to drown everyone.

The downturn has caused retail sales to come crashing down across the board, from high-end chains to moderate retailers, indicating that consumers at every income level are keeping their money in their pockets as the Christmas shopping season approaches.

But out of the ashes has arisen a Depression-era sales strategy whose time has come...again.

Layaway is back, and cash-poor shoppers are flocking to the layaway counters at Kmart instead of whipping out the credit cards and paying 22% interest for months after the kids' Christmas toys lie broken or forgotten in the back of the closet.

What is layaway? Layaway is a way to make a purchase without paying the entire cost at once. It differs from a credit card purchase in that the customer does not get to take the item home right away, but rather has to "lay" it "away" until it is completely paid for.

Kmart Lay-Away offers a generous eight weeks to pay, and a small service fee of $5. If the customer is unable to make the payments, the item goes back on the shelf and the customer is refunded those payments already made, minus a cancellation fee of $10. Kmart collects those front and back end fees ($15), or a 10% downpayment when the items are first purchased. As long as the bi-weekly payments are made, Kmart will hold the item for you. And best of all, you don't have to use your credit card!

There are a number of items that are not eligible for the program, including larger ticket items like cell phones and personal computers, but happily, not on that list is an item I never considered buying before because of the price - the Xbox 360.

At $299, it just represented more than we were willing to pay for yet another video game system, even if it does boast the best games and graphics for older teens like my son.

But now with Kmart's layaway program, even though there are only four weeks until December 5, when items needed for Christmas must be paid for and picked up, that is still only $75 a week, a much more manageable amount than trying to find $300 all at once. It's even worth taking a ride out to Brick, NJ, which is the nearest store to where I live that offers the layaway program.

I can remember the excitement of going with my grandmother to make layaway payments at the big department store downtown when I was a little girl. She would take out a $10 bill with a flourish and make a payment on a secret special gift for me. By the time Christmas came, it didn't even matter what it was. The thrill of anticipating the gift was a huge part of my enjoyment.

As shoppers are tightening their belts, we can use all the thrills and anticipation we can get to offset the anxiety many are feeling about job uncertainty and high gift prices. Bravo Kmart, for reviving a practice that will enable cash strapped families to have a Merry Christmas after all.