What Ever Happened to Layaway?

I recently overheard a Niagara Falls consumer lamenting the disappearance of layaway at a discount department store.

"Look at all these nice coats," she said, sorting through a rack of winter jackets displayed well before the first flakes of winter had flown. "They really screwed us up when they got rid of layaway."

Looking into her tired eyes, I saw my mom. I wanted to cry.

"I know," I said. "And once you get the money to buy them..."

"They're all gone," she said.

"Yep."

Every June my mom would take my sisters and brothers and me to Hills Department Store to put school clothes on layaway.  All summer we would pay on our account, bringing a big brown box of clothing home just in time for the first days of school. What would we have done without it?

Probably the same thing many others are doing now. Opening store credit cards and racking up more debt. Sure, you get to take the clothes home right away, but you pay a hefty price for it. Department store credit lines have some of the stiffest interest rates and late payment penalties.

With layaway, when you couldn't pay, do you remember what happened? They put your merchandise back on the shelves and refunded your money. But if you don't pay your credit card, you're shackled to a debt that just keeps getting bigger and bigger.

How have you gotten on without layaway?

--- Samantha Maziarz Christmann

Comments

[Hunter]

Only place that still offers lay-a-way is K-mart. They charge a 5 dollar fee, it is far cheaper than high interest rates.

[Mark]

I have a small retail business and had a layaway program but I put a time limit on it, say 30 days. In most cases that worked fine.

[Lydia Bezou-Hojnacki]

With space and utility costs skyrocketing over the past 20 years, it is not surprising that stores do not want to hold your merchandise for you. Additionally, many people--same ones, probably, who don't pay on their credit cards--did not complete their payments and "old" merchandise, out of season, had to be returned to floor stock. Sad, but true. We, in this country, have been hurt by irresponsible consumers, whether rich or poor.

In God We Trust--all others pay cash.

[Piper]

Sorry, I don't buy the bit about "old" merchandise. The retail industry has gotten ridiculous when it comes to "seasonal" items. I used to be able to buy a winter coat until the end of January. Now, if you don't buy it before Christmas, too bad for you. The swimsuits are out on the racks by Dec. 27th. High fashion may operate on the "one-season ahead" theme, but in the real world, you buy stuff as you need it. I remember when people used to put toys on layaway starting in Sept or Oct, and pay them off in time for Christmas. I have no problem with the time limit; in the old days (20 years ago) there usually was a limit and I bought a lot of things that way. Now you have to buy it immediately or it's gone, which of course means you have to pay full price; by the time an item goes on sale, the most-worn sizes are gone and only the extremes are left. If the stores want to know why people are buying more online, they only have to look at their own practices that are driving customers away.

[Dennis]

Not sure I buy that "irresponsible consumers" and "skyrocketing" utility and space costs are the reason for layaway disappearing from the retail landscape. The real reason there's so little layaway offered these days is that stores can make more money with credit cards. There is much more money to be made by driving people into debt (or at least near-debt, and then keeping them there).

NOBODY in America wants personal financial responsibility. Not the buyers, not the sellers, not the lenders. Saving money, and only buying what you can afford (through layaway for example) are hopelessly out of fashion. You think the $700 billion we just forked over to Wall Street is going to fix anything? It's gone as an alcoholic homeless man's sandwich money!

[Lydia Bezou-Hojnacki]

Dennis, I loved the comments in your second paragraph. How true!

My comments on layaway were somewhat simplistic. Having worked in retail as a youngster 50 years ago, I can attest to the space needed to keep the goods; the insurance and security needed to prevent shrinkage of SOLD stock, and the LOSS caused by having to return unpaid for merchandise to the floor when it is out-of-season.

But, yes, you're correct about credit cards. Instead of paying for layaway, stores found a better source of additional money: credit card interest from slow-paying customers. The credit cards also allowed more people to be deluded by the phrase, "The more you buy, the more you save."

What a racket!

[Diana]

Thank God ,for K-Mart because I don't know how my children would get their school clothes every year.I still do not understand why Walmart chose to stop offering their lay-a-way program.If anyone knows why please enlighten me.

[WalMart Manager.]

The reason why retail stores do not offer layaway is plain and simple. The choose not to hold the product for customers who cannot afford it at that specific time because someone else will be right through the door to buy that merchandise in full. Sales need to be made TODAY. That cash needs to be put on todays balance sheet. Not several months from now. Consumers do not seem to understand the small margin of profit those in the retail industry receive.
Layaway is an archaic method for payment of goods from a time when consumers were honorable and settled their debts in a timely manner.
As for merchandise becoming outdated? It is absolutely true and as so few of you seem tounderstand, no matter how much you say parents shouldn't let their children dictate what they wear, use for entertainment and eat, that is reality. Try selling 25K worth of Hannah Montana investment at a profit 4 months after it has been released when the distributor just sent the "newest" line out. Layaway was done away with for the simple reason of people defaulting on it and the fact that there are always more customers willing to pay full price right then and there. Deal with it.

[Rachel]

Wow, I hope you really AREN'T a Walmart Manager.

Deal with it.
Great customer service!

[Mike Klein]

Have you guys heard about the company SigmaPoints (www.sigmapoints.com)? It sounds like its similar to what you guys are talking about. I have been using them for about a year and have gotten some pretty cool electronics and now my wife and I might be getting to go on a cruise through them. What you do it put money into your account with them (I do it every week) and then get points. You let your points build up over time and then use them to go shopping in their catalog or book travel through them. It's pretty cool so hope it helps...Mike