Layaway

Layaway When I was a kid, I remember signs in department stores and in the windows of local purveyors that offered “layaway” plans, providing families with the opportunity to plan and save to buy that Lionel train set, that shiny blue Schwinn bicycle, or that nifty Flexible Flyer sled. There were no charges, no service fees, nada. Well, welcome to the next generation of layaway. Major chains, including Kmart, Sears, Walmart and Toys “R” Us, are among the retailers offering layaway services during the upcoming holiday shopping season and marketing the effort heavily to consumers. At Walmart, each item must cost $15 or more, customers must have a total layaway purchase of at least $50, and they must make a 10% down payment on the total purchase price. Shoppers also must pay a non-refundable $5 service fee, and there is a $10 cancellation fee on orders that are not picked up or cancelled by Dec. 16. So, you pay Walmart with an advance plus a service fee, and you pay again if you don’t purchase the merchandise. They sure are taking the edge off nostalgia. Nevertheless, what this reflects is the continuing behavioral change in the American consumer, who is becoming more fiscally conservative. The ripple effect of this trend will be significant.