The use of credit cards to pay for holiday shopping will be down ten percent this year, according to The National Retail Federation. It seems many consumers are turning to layaway instead.
Kmart has offered layaway for years. But some stores like the one near Alameda Avenue and South Broadway Street in Denver just re-started their layaway program this fall.
"It's been phenomenal," said Karen Wood, assistant manager at this Kmart. "Once the word got out it was just great. People told their friends, we get a lot of families in now that are buying for each other, going in together, mothers, daughters, sisters. They come as whole groups now, rather than just as individuals."
Sears Holding Corporation owns Kmart. The company won't release any specific statistics to illustrate how successful the program has been. But at the same time its expanding what it offers its customers.
Last year, Sears brought layaway back to its stores. This year, it is adding to the list of products available for layaway, including Black Friday door busters.
"Credit cards maybe are harder to come by and people are looking for different options now, "said Mike Amaral, manager of the Sears store in Denver's Cherry Creek. "Layaway is a great option for them to spread the payments out on the weekly period."
Shopper Alethea Mukendi bought all her Christmas gifts this year for the first time through layaway.
"Funds were funny this season, so it was better this way," Mukendi said. "Pay a little bit at a time. (I) really didn't have the money."
Generally, consumers have eight weeks to pay off their merchandise. There are also fees, $5 you'll never get back and customers will have to put down 10 percent of the total layaway purchase. If you change your mind, the cancellation fee is a flat 10 bucks.
"(Layaway) is coming back," said Paul Golden, spokesman for the National Endowment for Financial Education, "because people don't want to accumulate any excessive debt, plus they're also dealing with issues like having their credit card limits lowered and may be that's a reason they don't want to use them this holiday shopping season."
Golden suggests it's good to have a plan, a list of what presents you're buying before going shopping.
"A lot of us fall in the pitfalls where we pick up those one little impulse item here and there, trying to improve the quality of our gift. If we buy more it's gonna be a better gift, that's where a lot of people get into trouble, sometimes layaway can help with that," Golden said.
Toys"R"Us, TJ Maxx and Men's Warehouse have layaway plans available. Wal-Mart does not.
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