Holiday shopping's in full swing, building perhaps toward a merry climax at retail outlets.
For many shoppers, that will mean paying the final few installments on their layaway plans.
Laying away, the practice of purchasing merchandise over time rather than paying for it all at once, without interest charges, has made a comeback over the past few years, industry experts said.
It helps to meet the needs both of credit-starved shoppers and customer-starved retailers, and it's a throwback to an all-but-gone business era that was marked by much scarcer dollars for families to live on.
But the Great Recession and a dearth of jobs have combined to give the practice of laying away a new lease on life.
"It's extremely profitable for us," said Jennifer Weld, a Kmart store manager in Columbia. "Customers can even put our clearance items on layaway, and right now we have a huge amount of toys and electronics (in storage)."
Kmart, the national retail giant that re-invented itself after the rise of Wal-Mart and has nine locations in the Midlands, is one of several businesses that stuck with layaways as other retailers abandoned the practice, which analysts say can be both expensive for retailers to maintain and difficult for them to administer.
Now, Kmart touts the program in its advertisements and even makes the service available online.
Layaways aren't for everybody, though.
"There is an increase in the popularity of layaways, but it depends on the type of retailer," said Marianne Bickle, director of University of South Carolina's Center for Retailing. "I don't think layaways will become popular again for retailers (across the board)."
Wal-Mart, the world's largest retailer, abandoned its layaway program in November 2006, but other national retail giants such as Sears, Marshalls, T.J. Maxx and Burlington Coat Factory have kept layaway service in place.
Most recently, Toys "R" Us, the national children's toy store giant, opened up its store stock to layaways last year. The company said the program has been successful and is continuing it this holiday season.
Particularly big at Kmart in the 1960s, layaway now is proving to be a "differentiating factor" for the retailer. The service brings more people through the doors in a tough economy, Bickle said, as more consumers are looking to pay for holiday presents without using credit.
More than four in 10 holiday shoppers say they will rely on debit cards as their primary form of payment this year, a 20 percent increase from 2005, when just 34.3 percent said they would, according to a new report by the National Retail Federation.
Using cash this year will be 25.7 percent of consumers versus 24.9 percent last year, according to the survey.
And 27.6 percent of shoppers in the survey say they will charge their gifts, the lowest since 2002.
Kmart's layaway program features two plans: an eight-week payoff plan for online shoppers and an 8- or 12-week plan for in-store customers.
Kmart layaway customers pay a $5 initiation fee for the 8-week plan and $10 for the 12-week plan. The customer must also make a down payment on the merchandise at the time they make the layaway, equaling either $15 for the 8-week plan or $30 for the 12-week plan, or a straight 10 percent down payment, whichever is greater.
If the customer decides to cancel the layaway, they pay a $10 or $20 cancellation fee and get refunded the payments they have made on the merchandise, which is then returned to shelves.
Every layaway differs somewhat from business to business, but layaway customers generally pay regularly planned installments on the merchandise until it is paid off.
Born in the Great Depression, layaways fell on hard times in the 1980s with the advent of instant credit and the widespread availability of credit cards.
The shopping public swiftly transitioned from a pay-as-you-go consumer base, to a buy-now, pay-later base, which still figures heavily into a debt-ridden U.S. society, financial analysts have concluded.
And more are taking advantage of layaway as a way to pay for even everyday needs as availability of credit gets tighter.
At Kmart, layaways are not limited to Christmas purchasing, said regional manager Randy Bright. Kmart makes virtually everything in its stores available for layaway, except most perishable items, and some use it for everyday needs, such as clothing, he said.
"We run the full gamut," he said. "I would certainly say the last few years — three, four, five years — we have seen a resurgence in layaways."
Source: McClatchy-Tribune Information Services.