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Layaway continues its comeback; First Kmart and now Toys R Us
October 27, 2009
Kmart must have been on to something last year when it went old school with a layaway plan last seen in the 1970’s. It seems that other retailers like the ideas too.
As I wrote at the time: “For those of you too young to remember layaway, it is a pre easy credit system in which a consumer picks out an item they want, makes a down payment on the item, and then makes a series of payments until the item is paid for. The retailer keeps the item in “layaway” and gives it to the consumer when the last payment is made.”
It looks like Kmart was on to something because sister company, Sears, Burlington Coat Factory and now Toys R Us are doing layaway programs as well. In fact, according to a Cleveland Plain Dealer article entitled, “Layaway Guidelines, 10 things you should know before you sign up”: Kmart, yes Kmart, offers an on line 24 hour layaway service.
What I found very interesting in the article was a new twist on layaway, a $5.00 or $10.00 fee that is being charged to set up the layaway agreement. That means that the retailer has a whole new profit center. That’s brilliant because even if a consumer changes their mind the store keeps the fee.
Layaway is back and it’s smart. It will be interesting to see if more retailers follow suit.
Posted by Richard Gottlieb on October 27, 2009 | Comments (0)
