Layaway is getting more customer-friendly and modern with retailers offering ways to pay online.
Some wonder why even have layaway anymore in a need-it-now world. But a new generation is looking for alternatives to credit cards, fearing they will miss that crucial post-Christmas payment kicking in higher interest rates.
It's also a handy tool to hide a Christmas gift out of the house. Parents, you must know kids are savvy enough to take a pair of scissors to peak inside that Amazon box and tape it back up. You're staring at one guilty party starting at just 6 years old.
Despite added features and services, layaway is such a niche service that only a handful of nationwide retailers offer the service. The National Retail Federation doesn't even track layaway statistics in its breadth of shopping data. But November should still see a spike in new holiday layaways compared to the previous two months, solely because 41 percent of shoppers say they will start their holiday shopping this month, according to the National Retail Foundation.
You don't even need to go to the store to use layaway at Kmart and Toys R Us.
At Toys R Us, the toy giant offers free online layaway and offers the option to either ship the items to your door or pick it up in store for free. The toy store is waiving its service fee for the holidays, but does require a 10 percent down payment.
"We see that our customers
use layaway for a variety of purposes, from securing the must-have gifts of the holiday season early, to using it as a way to store bigger items for an extended period, to making a series of flexible payments over time," said Alyssa Peera, spokeswoman for Toys R Us. "While layaway is not driven by the down economy as it was several years ago, layaway in general continues to be a way we make shopping easy for our customers."
The final payment for Christmas layaway orders are due Dec. 11, Peera said.
Kmart's layaway plan
Kmart, which offers year-round layaway, offers online layaway where payments can be automatically deducted. Once it's paid off, customers can schedule an in-store pick-up. The items must be available in your local Kmart to be available for online layaway.
Kmart is offering no money down on layaways in-store through Nov. 15, and Shop Your Way members earn 5 percent off toys, sporting goods, jewelry and home goods. A penny down payment is required for online layaways. The promotion also waives any minimum purchase amount.
"We've seen a great response from members who are shopping with us and taking advantage of No Money Down layaway," a Kmart spokeswoman said. "They are excited to put hot items like toys, home products and apparel on layaway, without having to put any money down."
Sister company Sears also offers year-round layaway with online options, making it easier to get some larger items like refrigerators, stoves, lawn mowers and patio sets. But Sears does charge a service fee -- $5 for eight-week plans and $10 for 12-week plans. Also, the down payment is larger -- $20 or 20 percent for eight-week plans, and $35 or 20 percent for 12-week plans. (The 12-week plan is for purchases more than $400.)
Payments can also be made online or in store. Items will be picked up either in the store, or if it's a large item in a warehouse, a pickup or delivery must be scheduled.
No Walmart online layaway
Walmart only offers holiday layaway through Dec. 15 and it requires a $10 or 10 percent down payment, whichever is greater. The retailer isn't offering online layaway, but it does offer year-round jewelry layaway for engagement and wedding ring purchases.
Burlington Coat Factory, 1205 Cortez Road W., also has holiday layaway enticing shoppers with a $5 gift card for all layaways paid and picked by Christmas Eve. Essentially, the store is refunding the $5 layaway service fee back as store credit. Burlington charges a 20 percent deposit. If shoppers cancel their layaway and want a refund of their payments, they will not get their cash back. Instead, Burlington gift cards will be issued, according to the store's website.
Two national clothing stores make it a bit more challenging for layaway. Marshalls and TJ Maxx, part of the same company, do not offer layaway at all stores. Locally, the Fashion Oaks Marshalls and Town N Country TJ Maxx offer 30-day layaway while the Manatee and Sarasota locations do not.
Layaway does have some pitfalls, whether that's cancellation fees, potentially high payments in a short period of time or refunds that might be issued on store credit. If managed correctly, it's a good trade-off to avoid paying for one Christmas over the next two to five years.
Charles Schelle, Herald business reporter, can be reached at 941-745-7095. Visit his blog at bradenton-herald-business.blogspot.com.