Jimmy and Stephanie Norris stood in line Wednesday with a shopping cart full of toys and electronics, a flatscreen TV precariously balanced on top.
The TV wobbled as Stephanie started putting her Christmas gifts on the counter. The Walmart cashier rushed to grab it, lifting it to the counter before it could topple.
She rang up the Xbox Kinect, cute toy animals and super hero play sets for a total of under $500, took about $50 from Stephanie and put the items on layaway.
“It’s easier to budget like that instead of all at one time,” Stephanie said. “With four kids we have expenses that they forget to tell us about. The teenagers tend to tell us the day before, and the others we find in their backpacks.”
Layway in 1.0 stage
This holiday season could herald the return of layaway shopping, a deferred payment plan regularly used before the days of credit cards. Christmas shoppers across the country are signing onto the revived program, which many say makes budgeting easier and avoids post-holiday hangovers when credit card bills pile up.
Almost two thirds of consumers across the country say they are open to using layaway, according to a September survey by the National Association of Consumer Advocates of more than 1,000 households. And those numbers stay about the same regardless of household income.
That’s a big change from the layaway days of old.
“It was almost an embarrassing thing to do because there was a stigma attached to that. It definitely wasn’t cool or interesting or a particularly good reflection on you,” said Christine Frietchen, who headed the survey. “We’re looking at the revamp of layaway, but it’s very much in its 1.0 stage.”
Bill blahs avoided
Programs vary from store to store, but most national retailers have a program similar to Walmart’s. For a $5 fee and 10 percent down, the store will hold at least $50 worth of merchandise until mid-December. Customers make payments until they reach the total price, then take the items home.
“This holiday season will really be a test case for stores to see if it’s worth it to bring back layaway in a more fleshed-out version,” Frietchen said.
The Stephanie Norris hopes it sticks around. She and her husband had credit card trouble in past marriages and are proud to now be card free. They said the $5 and potential $10 cancellation fee Walmart charges is worth the cost.
Having their Christmas gifts on layaway with a set amount due lets them plan and forces them to stick to a budget. Plus, grandma and grandpa are more than welcome to stop by the store and put some money on the tab.
Frietchen said despite the fees, layaway makes sense for a lot of purchases, even after the holiday season. Major purchases such as furniture and appliances lend themselves particularly well to the program. Rather than paying interest and buying them with a credit card, it may be better to gradually pay the layaway cost.
It has drawbacks, though. Obviously, layaway wouldn’t work when the item is needed immediately. Frietchen said she wouldn’t put electronics on layaway, either, because of the speed with which the products change.
Holiday shopper Stephanie Long said whether layaway sticks around for 2012, she’s happy to have the option today. It helps her stick to her budget, which has only gotten tighter during the recession. Without layaway, she said, she’s sure she would have been tempted to put her holiday cash towards non-holiday bills.
“There’s going to be something that comes up between now and then,” she said. “Everybody’s poor right now.”
Long is putting a laptop on layaway for her son, and plans to pay about $100 towards it every paycheck. It might be a pain to go into the store and lose a chunk of each check, but she knows it will be worth the fuss Dec. 25.
“That’s what he asked for, so he thinks he’s going to get it but he doesn’t know for sure,” she said. “He’s going to be tickled.”