Since it doesn’t look like the economy’s going to rebound in a big way any time soon, stores are bringing back an old standby: the layaway plan. I remember Kmart used to have a layaway department when I was a kid, and many people took advantage of the program.
How do you use layaway? It varies from retailer to retailer, but the store “holds” your intended purchases for an initial deposit (usually 20% of the price) for a set amount of time while you make weekly payments toward the total, until it’s paid off. Then, you finally get to bring it home. It’s generally used for large purchases of grouped items, or perhaps one big item. Layaway programs can last 30, 60 or 90 days.
Some places only offer it during the holiday season — ostensibly to get you to buy more presents — while others have it year-round. Retailers who offer layaway options include Kmart, Sears and Walmart. There’s usually a fee for the privilege of using layaway; the usual seems to be $5 or $10, with higher fees for more expensive items.
Is it just me, or does it seem like just another way to add to your debt? Without these programs, perhaps people would follow a budget for buying Christmas gifts. This is just another line of credit, and can be just as bad — or worse — than using a credit card to make the purchase.
I’ve seen it touted as a way to “hide” presents, but layaway always seemed a little sketchy to me. If you can’t pay for it and bring it home that day, maybe you shouldn’t be making the purchase!