Will Layaway Be a Key to Changing the Spending Culture?

The whole idea of layaway started in the ‘30’s – consumers who saw something they wanted but didn’t have the money to buy it would put a down payment on it and pay the merchant periodic payments until it was paid for. Then the merchant would release the item to the customer.

Of course, that was before credit cards and the whole buy-it-now-and pay-for-it-later culture that we’ve been in for the past 15 years or so. Add in our growing level of cynicism and memories of retailers suddenly going out of business (remember Circuit City last Christmas?) and you can easily see why layaway has gone the way of the do-do bird.

In 2006, Wal-Mart discontinued its layaway service saying that “the layaway process has really become very obsolete." Wal-Mart said demand for the service had dropped off, as consumers increasingly rely on credit cards and gift cards to pay for purchases. The idea of waiting to complete a purchase was no longer attractive.

Not so fast.

While economic conditions are beginning to look up, Kmart realized that the tough times aren't over yet and some families may be experiencing anxiety in regards to making back-to-school purchases. From school supplies to new clothes, back-to-school shopping is an added expense that can strain an already tight budget. Kmart's layaway program enabled moms to plan ahead for worry-free back-to-school shopping. Moms can use layaway to reserve "hot" back-to-school items early, pay over time and pick them up in time for school.

Of course, there is--you knew it was coming - -a website that will let you buy just about anything you want on layaway: Check out eLayaway.com. As it says on its site, it "allows you to buy the products and services that you want by paying for them through manageable monthly payments that you set." They have a calculator that will let you figure out the purchase price over 3 to 13 monthly payments. Payments are automatically deducted from your bank account every month. The fee for the service is 1.9% for every $100 you spend. Once you've paid for your TV, shoes, your fishing reel -- you can buy about anything -- then it's delivered.

Shopzilla has a new campaign called. “Layaway Black Friday.” You have to wonder that as the new credit card rules kick in during the coming months, will we migrate to a save-to-spend mentality?

Curious minds want to know…..