As the past few years have made it harder for people to justify making large purchases on credit cards, stores have been starting to bring back layaway. Paying for things on the installment plan has become more popular, as Walmart and other retailers are prominently featuring their layaway plans.
Walmart rolls back its roll back on installment plans
In 2006, according to USA Today, Walmart announced that there would no longer be any layaway plans available in its stores, with the exception of its fine jewelry. As the recession wore on, the people of Walmart clamored for the return of the layaway plan. In leaner economic times, people still want to be able to get a new television set or toys for the children, though they may not have the lump sum on hand or want to use their credit cards.
Walmart also wanted to reverse the past nine consecutive fiscal quarters of declining revenues. So, the company has announced that Walmart stores will have layaway plans available this year.
Trend of installment plans
Walmart’s layaway plan, according to the Olympian, is unfortunately going to be just for the holidays and it is targeted at holiday shoppers. It will run from Oct. 17 to Dec. 16. However, the plan is quite reasonable.
According to USA Today, only toys and electronics are eligible. A person must be purchasing at least $50 worth of goods, and only items costing $15 or more can be put on layaway. A customer has to pay a $5 service fee, and they have to have the bill paid in full by Dec. 16, or else they get a $10 cancellation fee.
Other retailers have been following the trend. Kmart started advertising its layaway plans several months ago, but according to Reuters, has recently re-vamped its website and emphasized its installment plans to attract shoppers. According to Daily Finance, Toys’R'Us and Sears, Kmart’s parent company, are also offering layaway plans for people who want to stretch payments out for a bit.
According to CBS, some other large chains that offer installment payment plans include TJMaxx, Marshall’s and Best Buy. There is also eLayaway, an online company that allows its members to purchase products from various retailers online with a layaway plan.
Better than a credit card
Layaway is a time-honored tradition that dates back a long time. Also called an installment plan, the premise is that a person wants to purchase an item but can’t pay in full right away.
The customer puts a down payment on an item and has a certain amount of time to pay the bill, at which point they take the item home. Unlike paying with a credit card, there’s no interest charged. The practice, according to Daily Finance, has been around since the 19th century but began to fall out of use as more people began using credit cards.