I DO remember "layaway". There were no interest charges and you certainly were motivated to get the item paid off asap since if you quit, you forfeited the money you had already paid....

I purchased a number of things on "layaway". No instant gratification, but it was exciting to make that last payment and take the item home. LOL

I was 25, hadn't seen a dentist in 10 years, was TERRIFIED, but made the appointment anyway. It was only for a cleaning, but I KNEW if I didn't start going regularly the next appointment would be painful and even more expensive.

I was told I needed 2 crowns at that visit. I told the dentist I couldn't pay for 2 crowns... he offered me "terms"; he picked the filling most likely to fail and I paid 1/2 "up front". I went to his office weekly for however long it took to pay for it. And then we did the next one the same way.

He was a saint! he trusted me to pay him and I DID. Know what? I've not missed a 6 mo. dental visit since I made the initial appointment and swallowed my fear. But that dentist gave me the courage and ENcouragement to assume control of something that really had me flummoxed for a long time.

I remember hearing last year that Wal-Mart was terminating its layaway program -- Christmas 2006 was the end of it.

When I was a kid, I envied my friends who purchased clothes on layaway. They would describe each item in remarkable detail and the anticipation was fun for all of us.

I never got to layaway anything, but my mom was big on sales!

Here is a link that might be useful: Wal-Mart Will Phase Out Layaway Program

Chelone, the dentist let you have the dental work up front though right? More like credit, one tooth at a time. I sure hope he didn't make you pay weekly with the promise of doing the work later, LOL.

He does sound like a gem and you were lucky to find him.

Imagine. This week you get a shot of novocaine. Next week I'll fire up the drill!

Yeah... I know, chuckled about the novocain, too. But layaway is credit, too... leveraged with the item, not simply your "good name"... you promise to pay and when you do you get the goods.

Seems strange to me that "layaway" is being phased out... esp. now with so many people so mired in debt. If the sale is completed the store makes money... if the layaway terms are not met, the store simply puts the item back on the shelf and loses nothing.

As I recall from my retail experience, there were certain items that were not sold on layaway... esp. the "seasonal" ones that couldn't be put on the shelf and sold in a timely manner.

It seems like everything is seasonal now, and the seasons have gotten shorter. I remember reading somewhere that there are now several seasons of clothes where there used to be one. Probably by the time someone could or could not pay for the item, it would be out of style and not desired by either party. Especially clothes. Also, all the stores seem to be crammed full of stuff; they probably don't have room to store a lot of items on layaway or the staff to manage them.

Well, another reason is the well established tendency to spend more when using plastic as opposed to layaway.

It really is too bad. Learning to postpone gratification and save for things I wanted was a great lesson for me.

What do you want to bet that in a few years the "latest" boon to sales will be the REsurfacing of "layaway"?

How scarey is that?

Buying stuff on credit... getting the product *now* seems a lot more lucrative for both the credit company and the retailer.

These days, layaway seems like a retro-novelty sorta thing! It's almost charming.

Ah memories! In high school I worked from time to time in the layaway department at K-Mart (this was 20+ years ago). The big problem back then was where to store all the inventory people put on layaway because people would sock away just TONS of clothes. Inventorying it was a nightmare and of course it was a nuisance because the store didn't have a computer system. People didn't have credit cards as commonly so this was the best way to get what you wanted and pay it off.

Thank you all for writing 'layaway' and not 'lay-a-way'!!

That drives me absolutely NUTS! There are still some stores around here (NEPA) that do it, because I see that nonsense word regularly.

As long as you're not guilty of being a "lay-about".

Wouldn't want that, now, would we?

o j

I worked retail layaway a couple of years ago. It is, indeed, a wonderful system for people who would rather pay off their purchases a little at a time, rather than going into debt to have them immediately. However, when nearly half of all layaway customers never return for their purchases, it is bad business and I can understand why WalMart and others would choose to phase out their layaway plans.

The problem with layaway is that if a customer fails to return and finish paying off her purchases, both the customer AND the store lose money. How is that possible, you ask?

The customer loses money because the store absorbs the 20% or whatever that she has already paid on the purchase -- there are no refunds.

The store loses money because, by the time the merchandise can be returned to the rack, it is frequently out of season and has been marked as clearance. If the store is lucky, it will be able to sell the merchandise at 50% off.

Too bad, huh?

I saw a layaway sign last week. I think it was TJ Max.

KMart has it here.

Some of the K-Marts have phased it out. My brother's store did. The employee's were happy because they didnt have to deal with the piles of merchandise and hassel anymore.

Many years ago when the kids were little we had an Xmas club account at the credit union. When I got the check I would take it and go Xmas shopping and put everything in layaway, paying all but the last $10. This way the stores "hid" the kids gifts. I loved shopping like that.
Kathy G in MI

Layaway ... a program most popular at low- to mid-range stores ... was an easy way for the working class to secure items on sale (in the colors and sizes they wanted) if they didn't have the money up front. This way, they didn't have to worry about risking that the store would be sold out of whatever it was they needed by the time they actually scraped the funds together.

Prior to about 1985, less than 20% of Americans had a major credit card. It was actually quite difficult to get a VISA or MasterCharge line of credit from a bank back then ... typically you had to have an annual household income of at least $25,000 (in today's dollars, that's close to $47,000).

Today, however, close to 90% of Americans have a major credit card ... including people with NO meaningful income (students, retirees, co-signers, even WELFARE recipients).

Why is this? Thanks to Alan Greenspan and the culture of cheap and easy credit (that's now coming home to roost in this mortgage crisis), banks found a way to drastically expand its VISA and MasterCharge client base (extending credit to low-income people with poor credit), while offsetting the risk of default by starting an aggressive campaign to raise fees for everybody else.

Now that everyone can just whip out their plastic, what's the point of layaway? People have become so used to spending money they don't have (and given the spike in personal bankruptcies, money they won't EVER have), they can't imagine not being able to walk out of the store with whatever it is they want.

Layaway may have been inconvenient, but very few people (if any) ever went into bankruptcy because of it.

"while offsetting the risk of default by starting an aggressive campaign to raise fees for everybody else."

??
I haven't paid a credit card fee in decades....

Manhatttan is right. The credit cards took away the assistance layaway gave people.

Celticmoom, I chucked about your comment of young people thinking layaway was insane. That's for sure. But you never know--they might think it was a really cool, new way to get something they cannot afford.

True, few CCs have *annual fees* anymore. But they have lots of other fees.
-Late fees are now routinely almost $40. Even if you're 3 hours late (payment must be recd by 8am of the due date. Who gets their mail at 8am?)
-Currency exchange fees. Remember when the sage advice was, when going overseas, pay for everything w/ a CC because you'd get the best exchange rate? No more. Now most of them (Cap One is an exception) charge 2% of the purchase price. That's on top of the percentage they take off the amt they give the merchant.
-Cash advance fees no longer have a cap. The sky's the limit.

Etc. And let's not forget all the fun fees banks levy, such as debit card fees and atm fees. (Remember how atms were supposed to save consumers money because the bank could cut back on staff? Now they whine about how much they cost to maintain.) All inflating. So you can't actually avoid paying someone a fee for using your own money, unless you're really really careful.

Guess living in a small town has its advantages, banking wise.

Besides never having paid any credit card fees, I have not paid any banking fees either!

Wal-Mart phased out layaway because it cost too much. Besides all the stuff not picked up, and then put on clearance (most of it isn't, btw, because most of it is toys and electronics), they had to pay to lease all those huge tractor-trailers sitting behind the store to hold it, plus pay for extra personnel to process it, box it, put it into the tractor-trailers, and retrieve it.

K-mart still has layaway, but they don't have the volume sales Wal-Mart does.

I don't think you ever could lay away sales items at Wal-Mart. I know when I worked there, you couldn't. Plus employees don't get their 10% discount on sales or clearance items.

I'm only 24 & I remember lay away. My parents never had much $ so that is how we all got our new school clothes/supplies @ the beginning of each school year. It was always so exciting to me when we got to go get it & bring everything home.

I wish they still did stuff like this. I use cc's now for what I can't pay for immediately, but lay away would be much easier & less stressful!

Kmart, Walmart, and TJX stores still do layaway.

ATTENTION ...KMART SHOPPERS..I worked at Kmart way back in the cabbage patch days (HS Student), IN THE LAY-A-WAY Dept... that was a great learning experience, pay a little for a period of time and you shall recieve, ..now, its' well....NOW and pay later, IF, you get around to it.

I transisioned the age of computers into this community, (sounds too old for a reume, huh?)and I'm all for bringing LAYAWAY back. Good teaching tool. I don't think the young ones are beng taught how to budget and the like. Immediate gradification. IMHO

Over here we call it LAYBY and most large stores have it. But it must cost them a bundle as some have offsite storage areas. Some places have a layby fee of around $1.

My 12 year old son discovered the joys of layby last year when a toy he was saving up for was on special. He was upset that by the time he had saved enough money for it, it would be full price again. I told him about layby and he paid off the toy over 2 months.

Haven't paid a credit card fee in years?

Maybe not a direct fee ... if you have a no-annual-fee card, have never exceeded limit, been late in paying, and pay off amount owing in full each month.

But ...

... the stores usually pay rent for the reading machines, and a commission on all of their volume, e.g. if they present a bill for $100., get paid $96. - 98. or so.

Which is paid by the patrons of the store.

Those of us who pay cash say that we should get a discount. Some tell me that the store's agreement with the card co. does not allow them to do that. Which means that cash customers help pay for the credit card system, as well.

Not only that, when I've discussed the value of cards at the check-out and a clerk says that it makes no difference to her ... I ask her whether she'd prefer that the store pay her from my cash purchase or from the credit card purchase of the person who preceded. Though she claims not to care, when I tell her that if it were to be paid tonight and were from my purchase, she'd get $100. of $100. owed, paid tonight. If from the credit card purchase ...

... she'd have to wait about 6 weeks ... and get $96. - 98. instead of $100.

They don't like that scenario much.

The credit card companies don't operate on hot air!

I've heard that about half of the credit card users pay off the balance in full each month, but recently heard that in the U.S. it's in the 40's percentage, and in Canada the 60's percentage of holders who do.
________________________

Memo to folks who carry store-issued cards and don't pay off balances owing in full monthly: do you know how to make about 35% return on your money - guaranteed?

Usually your favourite store that issued the card charges 25 - 28% annual rate on balances owing regarding purchases made on the card which are not paid by the next payment date.

Most of the stuff that most of us buy using the card is not tax-deductible, so you must pay the credit card fee with after-tax money.

If you are in 25% tax bracket, dividing 28% by 3 gives you about 9 ... multiply that by 4, gives you 36. So when you earn $36. and pay tax of 25%, or $9.00, you have $27.00 in after-tax residue in your pocket to pay the fee on the loan of $100. of credit card debt (if it could be carried intact for a year, without additional fees).

Good wishes for increasingly wise use of not only your income, ...

... but your assets, too ...

... and shrewdly (plus honestly) increasing the assets, as well.

You get 2 payoffs:

- in the short and medium term - a measure of financial F R E E D O M! and
- in the medium to long term - early retirement (more F R E E D O M!).

ole joyful

I was just thinking about this post. I heard there's been a resurgence of layaway now that people are maxed out and the availability of credit has siezed up. What's old is new again!!

In earlier times people bought for cash, or used layaway to put a product on hold till they could pay for it in full.

Then some bright bulbs figured that they could issue people a piece of plastic and let them use it to buy stuff now, then pay for it later. It caused an immediate speed-up of business done.

The issuers of the plastic charged high interest rates for the people who wanted/needed to pay somewhat later than next month, fees for late pay, fees for over-limit, etc. Paid for by the customers ... resulting in them having less money left in pocket to go out to buy more stuff: the card-issuer got it.

However ...

... then, along comes a downturn in the economy ...

... and people, fearing job loss, downsizing, etc. ...

... stop buying things - must pay off the credit card, etc.

So - one could shoot off a gun in many of the store aisles without hitting anyone.

Then the retailers and card cos. get really upset ...

... for the business dries up - heavily ... plus for a longer term than in earlier years, when they did the business for cash (or a small percentage of the total on their layaway plan). They were in such a hurry to get their sales made as soon as possible, earlier ...

... now there's the piper to pay.

And they don't like it!

I find it somewhat difficult to summon up much sympathy - especially when I, as a cash customer, have to help pay for the reduced payout and the deferral of receiving the money that the retailer must pay as a trade-off for getting all of that speeded-up business, earlier.

One seldom gets something for nothing.

ole joyful

The choice to use cash and shop at merchants that take CC is yours, so its hard to feel sympathy for cash users subsidizing the CC industry.

I personally feel if you have any financial discpline you are stupid not to use a CC. The economic benefits are too great to not to use a CC.

I get:

5% cash rebate on Gas, groceries, and drugstore purchases (it was great the few years Superwalmart was considered a grocery store). Cash rebates of 1-3% on all other purchases.

Up to a 55 day carry-trade on purchases.

Extended warranties, rental and travel insurance, purchase protection.

Don't need a cashier, can pay for gas at the pump or at a gas station w/o an attendent, make purchases online or over the phone.

Great finances offers: I refinanced my GF 18K HELOC with 0% CC offers for 3+ yrs with no transactions fees or any costs. I get constant offers for 0% APR for 1 yr. If someone offers me 15-20k for a year free, I'll be glad to take it. The trick is you have to be disciplined and organized enough to pay it back on time. I have no doubt I have received at least $5K in benefits over the last 5 yrs from using CCs.

Cash is not always king to business owners, I know several who prefer CC transactions:

Don't have to maintain large amounts of change.
Less worry about theft. Nobody wants to carry 10K in cash to the bank on a regular basis. Nobody sticks a gun in face for CC receipts.
No need to worry about counterfeits.
Waste alot of time counting cash.
Less bad check risks.
Harder for businesses and employees to cheat on taxes.
Get by with less cashiers, less change counting errors.
People probably tip better on CC than with cash.

A debit card could address a lot of these issues for people who don't want to use a CC.

chris - problem is many people who use credit cards do not have financial discipline - hence the resurgence of layaway.

I live in an area of people with good incomes. One time my Visa bill included mine and someone else's - must have stuck together in sorting by zip code. So the one in with mine was some neighbor. Neighbor charged everything on the card - one that gives you something back. They charged all their groceries, gas, every possible thing - I think to the tune of around $15K in one month - might have included some business travel - who knows. In any case, they apparently charged up more than they could pay off as they'd paid about 50% of it the prior month and racked up hundreds of dollars in finance charges. I think lots of people, no matter how much they make, spend more than they earn - which makes the use of credit cards pretty stupid for them.

"The economic benefits are too great to not to use a CC."

The economic benefits are there because all the retailers have increased their margins to pay for the CC's. I have serviced the retailers with pop, beer and snack cakes for the last 37 yrs. Margin was 15% for large retailers, WalMart, to 20% for local groceries to 25% for convenience stores, gas stations. Latest percentages are 20%, 25% and 33% to 40% at convenience stores.
A cup of coffe and a donut on a debit or CC really racks up the cost of the transaction because you pay a transaction fee, no matter the amount, plus a percentage of the amount.

"A cup of coffe and a donut on a debit or CC really racks up the cost of the transaction because you pay a transaction fee, no matter the amount, plus a percentage of the amount."

You make it sound like debit and CC customers are penalized with higher prices.
That has not been my experience!

I am another who charges as much as I can - to get all the good perks.
I pay off in full every month.

If I don't have the money to cover the purchase, I don't buy it. It really is not a difficult concept.