By BERNIE HORNICK
With Christmas shopping season near and credit card companies jacking up interest rates, consumers might want to revisit one payment option that’s making a comeback.
Layaway.
Just this year, Sears revived its year-round layaway policy and other retailers – including Boscov’s and TJ Maxx – push their plans in advertisements.
At Boscov’s at The Galleria, General Manager Rick Bausher said the chain never did away with layaway.
“It’s always been strong,” he said, noting the layaway sales figures of $5,100 from last weekend – Sept. 26-27 – alone.
“We do layaway all year long,” he said. “Obviously, it does spike significantly in the holiday season, beginning in October through Thanksgiving.”
Layaway may be a sound alternative to racking up bills on a charge card. The average layaway purchase at Boscov’s is for $50, and more than 1,000 customers take part in a given year.
Boscov’s is making a conscious effort to advertise its layaway program, he said, as other stores revive their retro practices.
Bob Boldin, an IUP finance professor, said that retailers are savvy.
“I suspect the stores are probably encouraging this as a way to keep business, instead of losing a sale because a customer might not have the full amount,” he said Friday.
“This was very popular a number of years ago. It tended to go out of favor because people were earning more money and paying for an item either with a credit card or some other way.
“The interesting part of this is a number of stores might offer credit cards, but people are maxed out,” he said, in line with the national economic downturn.
Also pushing customers to buy on the installment plan, Boldin said, are lower credit card limits, higher interest rates and tighter credit rules.
“When people don’t have money, they still want to do it (spend),” he said.
And now is the time, Boldin said. About 60 percent of yearly purchases are made during the holiday season.
At Sears, Manager Rick Gibson said, “We brought it back based on customer feedback. Our customers are loving it.”
He said 1989 was the last full year of layaway at Sears, except on jewelry.
Sears’ sister company, Kmart, never cut back on layaway, Gibson said.
Even ahead of the Christmas season, he said, his store had a successful layaway program for back-to-school items.
“With the difficult economic climate – with families on a budget – we wanted to help our customers,” he said. “I’m surprised a lot of folks aren’t doing it.”
Gibson said layaway makes it easier for buyers to plan ahead for the next holiday or birthday.
Even if a purchaser locks in an item at a certain price, he said, Sears will honor a lower price if the item happens to go on sale.
Wal-Mart – the nation’s largest retailer – has gone in the opposite direction, eliminating its layaway in 2006.
“Currently, there are no plans to reintroduce the program,” spokeswoman Kelly Cheeseman said last week from company headquarters in Bentonville, Ark.
She said layaway costs money, a cost that was spread to product prices in general.
“The best way for us to keep prices as low as we can go is to work with suppliers,” Cheeseman said.
Boscov’s Bausher also sees layaway as a valuable resource not only for consumers of all economic strata but also for secretive parents at Christmastime.
“Based on the fact they don’t want to take it (the gift) home and have their loved ones find it stashed away somewhere,” he said.
