Layaway Attracts Shoppers

More shoppers are using layaway to make purchases, according to a survey conducted by Sears Holdings. Of consumers surveyed, 73 percent said that, “They believe using layaway more often is a smart financial solution that can help them better manage their spending.” Susan Ehrlich, president of financial services at Sears Holdings, was more specific. “Kmart’s layaway program has experienced double digit growth since 2008,” she says. “Shoppers are seeking value in everyday purchases, and layaway creates the financial discipline that allows them to make a payment over a finite period of time. It gives shoppers a sense of accomplishment after completing their purchase plan.”

The mechanics are similar for all of them, though fees can vary by merchant. The consumer puts a deposit on merchandise, which the retailer either holds in storage or promises to ship from a distribution center at a future date. Typically there is a nonrefundable transaction fee of around $5. The customer then must make weekly or monthly payments for the layaway period, which can be as little as 30 days or as long as a year. Usually, there is no interest on the balance, which can make layaway a less costly choice than using a credit card.

Toys R Us has also started a new layaway program. In a twist, the program lets the customer put aside money without deciding what to buy. The shopper can pick out merchandise later on, as the holidays get closer. But it is not just big box retailers who see the advantages of layaway. is an online travel agent that lets customers afford their vacations in installments. Also on the Internet, website,, helps online shoppers save up for purchases. According to the company, “eLayaway will automatically deduct the payments from your bank account, and you will receive your order once it’s paid in full.” Another new online option (a free one, this time) is

According to a recent personal finance article in U.S. News & World Report, layaway is an often overlooked option that makes sense when credit is tight, especially before the holidays. Independent retailers, especially those like jewelry stores and hardware stores that carry expensive gift items, can benefit from offering the option to customers.