The Pros, Cons, and Details of Layaway and Why It's Coming Back

News of the economy, jobless rates, gas prices, and the cost of living seems to keep getting worse each day. In the midst of this crisis, the middle class and working poor are left barely making it, let alone able to afford the extras these days. It seems that America has backed itself into a corner by pushing credit cards onto consumers, only to trap them in high interest rates on loans. Now, everything is at a standstill as credit is all but totally frozen and buyers are avoiding credit like the plague. Now it seems that the old practice of layaway is making a comeback, much to the encouragement of those who work tirelessly to break even each day. Companies such as Walmart and Sears have done away with this option for lower income shoppers, and have made no plans to bring it back. Spokes persons for these companies predicted in the past that it would not have an effect on sales, but it has. Many working class families have vowed either to never shop with the companies again, or to never make large purchases there. Credit cards had made layaway all but extinct due to the appeal of "get it now and pay for it later." Even when the economy is on more solid ground, people may want to consider saving their money more wisely for a rainy day and using layaway plans.

Kmart requires a 25 percent down payment and a $5 fee, and is one of the very last national retailers that offers layaway for most of the items it sells. Many analysts are predicting that sales this year will be some of the very worst of the past decades. This meaning, that in the long run, most of the sales will be generated from layaway and not the typical holiday sales. People just don't have the money to spend on splurge items all at one time, or may want to hold onto the bird they have in hand. The lay it away plan allows for you to put a small amount down and make periodic scheduled payments on your entire purchase. Kmart also has lots of savings via email and their website which consumers can sign up for online. What most people don't know is these percentage off coupons can be applied towards layaway purchases and clearance items in most cases. Following when Wal-Mart announced its plans to cancel layaway programs at its stores, Kmart made a statement reaffirming its "commitment to layaway," which it has offered for almost 40 years. Besides the 25 percent down, Kmart also charges a $5 service fee for using the layaway and requires you to pay for the items within an eight week period. There is a $5 cancellation fee as well. When you have made payments and later cancel, you can receive a refund for payments minus the service and cancellation fee. Not a steep price when compared with the average interest rate on most credit cards.

TJMaxx is another retail chain that offers layaway to shoppers. An initial deposit of 10% of the total is required along with a non-refundable service fee. Customers must pick up layaways and pay in full within thirty days. Jewelry and clearance merchandise seems to be the only restriction as far as items being put on the layaway plan. All of their store locations do not offer layaway, but there may be exceptions during holiday seasons. TJMaxx offers a variety of family clothing and home decor for the public.

Lay-away.com offers consumers free layaway, almost 95 percent of the items which are sold are appliances and electronics. Robert Holland started the site about three years ago after struggling with poor credit and savings habits as a college student at Illinois State University. Layaway.com provides anyone, regardless of their household income or credit status, with a choice of high quality products for their home at affordable prices. Online users can find video games, toys, home audio and appliances, as well as automotive electronics. Users can shop from the comfort of their own home and put items on layaway for six months, but there is a $35 restocking fee for all cancelled orders, and a $10 minimum payment when doing so online. Several other online retailers offer buy it now and pay later or easy payment plans, however, many of them carry high payments or heavy interest rates just like a typical credit card, as well as tough credit allowances. In the end, it's best for most people to stick with the tried and true in layaway.