Sears Jumps on the Layaway Bandwagon

Effective Friday, November 14, 2008, layaway returned to Sears! Sears Layaway Program is great for shoppers who can't use a credit card but just don't quite have the whole amount to pay right now. For $15 or 20% down, whichever is greater, you have a chance to get all the gifts on your loved one's wish list, with up till December 23rd to pay in full.

However, some restrictions apply to the layaway program that may affect the price you pay. For example, the layaway program does not apply to Sears.com. Only merchandise in stock at Sears stores is eligible. Home electronics, home appliances and doorbuster specials are also not eligible. So if there are special deals available on that TV, computer or dishwasher you really wanted this year, or if your favorite line of sweaters is featured in a flyer as a doorbuster available only before noon, you will not be able to use layaway to take advantage of the special pricing. Check the layaway rules to be sure the item you want is not on the prohibited list.

Decide in advance whether a somewhat lower price or the ability to have your purchase paid for before Christmas is more important to you. The size of the discount, and your own history of being able to pay off a bill quickly should guide you here.

I am excited about the Sears layaway program. We did a significant remodeling of our home recently, so Christmas is going to be a little spare this year. But Sears has all the items on our list, and they are all eligible for layaway!

My son has had his eye on the Elder Scrolls series of PC games, as well as a game for the Wii called "Tales of Symphonia - Dawn of the New World". But just to get those three games is $130, so I would be happy to stretch that out over the next 45 days and pay it off just before Christmas.

Then there is the question of his clothes. Ugh. His pants legs are too long so he walks on the edges and they are always ragged. Parents of teenage boys - you know what I'm talking about! He doesn't like certain kinds of materials, so forget jeans or any kind of hard, heavy material. He just won't wear it. Dress pants? Forget about it.

Enter Levi's Action Slacks. They are wrinkle resistant, comfortable and made of a flexible material - perfect for work or church or somewhere I don't want him to look like a slob. And right now they are on sale for $19.99 - so one in each color is only $60 and I can add it to my layaway order for a total of $190.

Finally, after 25 years it is time to get new pots and pans. So for my husband the cook comes a new set of Farberware Millennium Soft Touch Stainless cookware, including three covered saucepans, two skillets, two tools and a covered stockpot for only $99 after a mail in rebate.

Amazing - 45 days to pay less than $300. No interest, no balance after the holidays. I might even have enough left over to buy something for myself!

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.