Here's one more sign that retailers are still not singing out of the same recovery songbook as the federal government: Sears and Kmart are starting Christmas Clubs to lock in some holiday shoppers now.

You remember Christmas Clubs (if you're of a certain age): the passbook accounts you used to have in your local bank to save for the holidays...when you had a local bank, that is. Today, the retailers would rather have shoppers save now for the holidays than charge ahead, and then not pay what they owe later.
Sears Holdings (SHLD) today introduced the Sears and Kmart Christmas Club card, a stored-value card that shoppers can use to set aside money until Nov. 14 to pay for their holiday shopping at either store. As an incentive, any balance set aside between now and Oct. 31 gets a 3 percent "reward" -- up to $100 -- based on the total on Nov. 14.

The whole thing came about because consumers are worried about how to pay for this year's holiday season, said Susan Ehrlich, Sears Holdings's president of financial services, who quoted finding that 56 percent of Americans will cut back on this holiday's spending, and that 33 percent of consumers making changes will use their credit cards less.

"They want more ways to provide the very best holiday they can, and they want to do that in a responsible way," Ehrlich said in a statement.


Replacing plastic with the Christmas Club won't hurt Sears and Kmart, either. Most retailers have had problems with bad debts during this recession. Too many customers have defaulted on their store cards when they lost their jobs or had to choose between making those payments or their mortgage. By locking customers into those cards, the stores guarantee traffic and, most likely, additional sales. If gift cards are any indication, many customers will overspend beyond their balance once they get into the store.

Seeing the back-to-school season slipping through their fingers, retailers are not ready to concede the make-or-break holiday season, no matter how dismal consumer spending may look.

Kmart had some success last year bringing back layaway. (For those too young to remember: shoppers would visit their goods at the store, put on hold until they had paid them off and could bring them home.) So now both chains are ready to revive another old-fashioned concept, and a good match for another old-fashioned shopping concept making a comeback: spending within your means.

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