Layaway for the Holidays

As The Commerce Department reported the biggest decline in retail spending since 2005, it's no surprise that with our plummeting economy headed into a recession, that layaway is making a comeback during a time that many liken to the Great Depression, where layaway has its beginnings.

Unlike credit card purchases where you swipe the card and walk out of the store with your purchase, layaway works differently. On a layaway plan you make a holding deposit, thus laying the item away so that it will not be sold to other customers. You then make payments until the item is paid in full. Only then do you get the pleasure of leaving the store with your items in tow.

Retailers are hoping that the layaway plan will bring in customers who have otherwise cut back on discretionary shopping or stopped altogether. With the holidays fast approaching this may be a lifeboat for families and individuals who are on a tight budget and can't make upfront personal and gift purchases.

Kmart is one of the biggest chains promoting their layaway plan this year only charging a $5.00 fee to lay aside your items. Kmart will probably be a big choice for parents who wish to buy toys and other big ticket items like popular game consoles for their children. The layaway plan will allow parents to pay a make weekly or monthly installment payments. Splitting the cost to purchase an expensive video game into affordable increments is appealing when you desire to give one to your children but don't know how you're going to come up with the money all at once.

Burlington Coat Factory offers a layaway plan as well. Many of the clothes are name brand but without the name brand prices. I have a friend who shops Burlington annually to buy her three children school clothes on layaway prior to the start of each school year. She says it makes the hassle of back to school shopping easier by allowing her to make affordable installment payments with each paycheck instead of exhausting an entire check to clothe three growing kids.