Layaway is appealing to people who are on a strict budget, and who don't want to worry about hiding gifts.

W


e haven't even celebrated Halloween yet, but that hasn't stopped retailers from letting us know that, should we need it, layaway for the holidays is already available. Customers are seemingly interested in the concept, too—with people looking to shop early for their gifts but not yet having the cash stowed away, layaway is a better option for some people than using credit cards.

Layaway works like a credit card in that you can pay in increments for things you want to buy, but is unlike it in many more ways than it is similar. For example, with credit cards you get the items when you use your card. With layaway, you "lay away" the items until they're fully paid for—you pay a fraction of the cost up front, then pay off the rest in a certain amount of time, and as soon as you pay it off you get to bring your purchases home.

lawyay Layaway is being brought back at many department stores.

Layaway also doesn't involve interest charges—and that's one feature that might draw in customers, since credit card interest rates can be extremely high, sometimes topping 30 percent. Furthermore, this is great if you're living on a strict budget since it allows you to spend more carefully—here you're not using "plastic money," you're spending real money, just not all at once. The instant gratification of using a credit card isn't applicable with layaway, so for impulse shoppers, layway's a better option.

Big-box stores like Wal-Mart and Best Buy are offering layaway for a small fee (usually around $5, which is refunded at the time you pay off your purchases), as well as a percentage (usually 10 or 20 percent) to put down at the time of sale. The pay-off timeframe is usually anywhere from eight weeks to 90 days, usually with a deadline that is just before Christmas.

Another reason people like layaway is that it means they have to hide their holiday  presents for a shorter amount of time. As sneaky kids dig through their parents' closets to find presents, there's nothing there—because the presents are still at the store.
Between spending money responsibly, the convenience of a payment plan, and not having to hide gifts from the kids, it's not surprising that layaway is increasing in popularity to the point of being offered in September and October.