The Return of Layaway
You thought it was a relic of your parents' -- or even your grandparents' -- generation. But layaway is making a comeback.
This week, Sears reinstituted layaway in its stores across the country after a hiatus of nearly two decades. Company spokesman Tom Aiello said customer demand for the service, which allows shoppers to put merchandise on hold with a small down payment and pay it off over time, has spiked as the economic downturn lingers on like a bad cold.
Sears phased out layaway in 1989 because of waning demand, though it kept the service in its jewelry department, Aiello said. It was not alone: Scores of other retailers have done away with layaway, with Wal-Mart ditching the program in 2006.
But Sears' sister chain Kmart bet that interest would rekindle this year. Early this fall, it began advertising its layaway service in TV commercials and on the radio for the first time as a way to connect with increasingly cash-strapped customers. During a company conference call a week and a half ago, Aiello said, store managers said shoppers were demanding the same service at Sears. So the retailer scrambled to make it happen.
Customers can now put merchandise on layway at any cash register in the store with a deposit of $15 or 20 percent (whichever is greater) and a promise to pay it off by Dec. 23. Aiello said that feedback from both Kmart and Sears stores shows not only are shoppers with tight budgets signing up, but also those wary of whipping out the plastic card.
"It's definitely being used by a broader spectrum of customers than one might initially assume," he said.
Plastic seems to be getting short shrift in more ways than one this holiday season. The National Retail Federation, a trade group, said gift card sales are expected to drop 6 percent to $24.9 billion, according to a survey conducted by BIGresearch. The number of people who said they plan to give gift cards dipped from 56.6 percent last year to 53.5 percent this year. And those who do will spend less on them, down to $147.33 from $156.24.
"Since gift cards never go on sale, some price-conscious shoppers will be passing up gift cards in favor of holiday bargains," said Tracy Mullin, NRF chief executive.
That's bad news for retailers and the size of your stocking on Christmas, but be honest -- how many unused gift cards do you still have hanging around from last year? Now may be the time to dust them off.
By Ylan Mui |
November 19, 2008; 7:01 AM ET
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