In stores that offer layaway, it's beginning to look a lot like Christmas.
A manager at Kmart in Shawnee said since Wednesday the entire Christmas section was stocked, and shoppers have reported seeing trees, holiday decor and more at Walmart stores even though Christmas is 14 weeks away.
Layaway's comeback may explain why. Walmart and Toys R Us expanded their holiday layaway programs this year and are encouraging shoppers to choose items early, giving them more time to pay. Seeing holiday merchandise displayed no doubt helps put them in the mood.
In the past decade, most retailers phased out layaway, which allows consumers to pay for merchandise such as toys, home appliances and electronics over time, then pick up before Christmas. But a few brought it back during the economic recession.
Walmart has continued its layaway program year-round for jewelry only.
Buying items with layaway is different from using a credit card, the Better Business Bureau said, because the buyer isn't charged interest on the item and can't take it home until it is paid off.
“Layaway services can be a great alternative to using a credit card,” said Judy Pepper, president of the Better Business Bureau of Central Florida. “However, it's extremely important that customers take the time to make sure the service provided fits all their needs and they know what fees to expect.”
Cristy Cash, director of counseling at Consumer Credit Counseling Service of Central Oklahoma, said the changes retailers made this year make layaway an attractive option for people who want to avoid unwanted credit card debt during the holidays.
“One reason we like layaway is because it's part of planning for an expense,” she said.
The biggest downfall of layaway programs is fees, so consumers should read the fine print to find out what the fees are and what happens if they are unable to continue making payments, she added.
For the first time this year, Toys R Us and Walmart started layaway a month earlier, in September, giving shoppers more time to pay. Both retailers also reduced their fees. Walmart dropped its fee from $15 to $5, and it will now be refunded with a gift card after the final payment is made. Toys R Us waived the fee completely for layaway orders made before Oct. 31. Kmart and Sears, which have layaway year-round, also eliminated fees.
“By kicking off our holiday layaway earlier, it gives customers the maximum amount of time to pay for those items,” said Katie Reczek, a spokeswoman for Toys R Us, which reintroduced layaway in 2009 and expanded eligible items in 2011. “It's grown in popularity each year.”
Reczek points out another advantage to layaway: giving parents playing Santa a place to “hide” large gifts like dollhouses, bicycles and swing sets until closer to Christmas.
Contributing: The Associated Press
Key questions to ask:
• How much do I have to put down?
• Are there any storage or service plan fees?
• When are the payments due?
• What happens if I miss a payment? Are there penalties? Does the item return to inventory?
• Can I get a refund or store credit if I no longer want the item after making a few payments?
• What happens if the item goes on sale after I've put it on layaway?