Back In Vogue: The Retro Way To Pay For Presents

An example of a layaway receipt. i i

A layaway receipt. The practice, which allows consumers to pay for something in installments, is making a comeback. Pamela Moore/iStockphoto.com hide caption

itoggle caption Pamela Moore/iStockphoto.com
An example of a layaway receipt.

A layaway receipt. The practice, which allows consumers to pay for something in installments, is making a comeback.

Pamela Moore/iStockphoto.com

If you're short on cash or your credit cards are maxed out, and you don't want miss out on the doorbuster deals this "Black Friday," you might have another option.

Many stores are offering customers a very retro way to pay for purchases this season: layaway.

It's a service where stores take a deposit and keep the goods until the price is paid in full.

Layaway was mostly discontinued decades ago. Back in its heyday, even John Travolta's character Tony was using it to buy a new disco shirt in Saturday Night Fever. In the '80s and '90s, plastic replaced layaway as the way to pay.

But now, with consumer credit no longer cheap or easy, layaway is making a comeback at stores like Sears, which is offering layaway for the first time in 30 years.

"It's fabulous," said Sharon Silvanick, a 56-year-old mother and customer relations representative, while shopping at Sears last week. "I only came in to pay my Sears bill, but then I saw the signs for layaway!"

Enticed by the offer, Silvanick quickly scooped up more than $150 worth of gifts for everyone on her Christmas list — and then some.

"My son's gonna kill me," she says. "Because I love his old girlfriend — and I love the new girlfriend too. So I'm gonna get them both a jacket, and so I am just thrilled. Just thrilled."

Silvanick says she's buying things she never would have put on her credit card. Layaway at Sears costs a flat $5, plus the minimum deposit of $15 or 20 percent — whichever is greater. There is a $10 cancellation fee.

Another layaway fan, Charlene Milagres, who is an occupational therapist with three small kids, says she's too scared to use credit cards right now.

"I'm living paycheck to paycheck," she says. "And I didn't want to have to pay interest for god knows how many months after Christmas. I don't want to have that hanging over my head."

Desperate Merchants

Sears is running a major marketing blitz around the resurrection of layaway. So is Kmart. And some TJ Maxx and Marshalls stores are dusting off their layaway counters that were being used as broom closets for years.

Boston College associate professor of marketing Kathleen Seiders says it speaks to how desperate merchants are this year.

"It's looking like a very, very bad season," Seiders says. "And I think retailers will do anything. You can see that with their early discounting; they will do anything just to get the merchandise out of their stores."

Still, layaway is not for everyone. It runs counter to the American culture of immediate gratification.

"I've never done that; I don't like that idea," says Andy Dimitri, a pianist from Boston. "If I want to buy something, I want to have it right away. I don't want to have to wait months while I pay for it. I would rather just put it on my credit card."

Wal-Mart says that's one of the reasons it ended layaway in the '90s — customers didn't want it. The company says it has no plans to bring it back, since it was costly, and cumbersome.

Seiders calls it an "administrative nightmare." But like any fashion throwback, layaway is beginning to update itself.

Online Layaway?

There's a company, eLayaway, which allows shoppers online or at stores like The Gap and Brookstone to pay a fee of 1.9 percent of their purchases. When the company is paid in full, the merchandise is automatically shipped to their home.

"We used technology to make it fast, secure and automated," says Michael Bilello, a senior vice president of business development for eLayaway.

Bilello says he expects to have 100,000 customers use his service by the end of the year. That's up 10-fold from last year.

ELayaway is also offering layaway on everything from tickets to professional sporting events to some health care. Soon, Bilello says, you can layaway your braces — or your hair transplants.

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