Walletpop told you last year about Kmart reintroducing America to the concept of layaway purchasing, where you pay for an item in a series of installments before you actually take possession of it.

Before banks started handing out credit cards to anyone with a Social Security number and a pulse, layaway was the go-to method for acquiring something priced beyond your means. You didn't get the instant gratification of a credit card, but you also didn't rack up any interest or finance charges.

In the teeth of a gale-force recession, America has once again embraced layaway, with the back-to-school shopping season in its final weeks.


The Salt Lake Tribune reports that layaway has gained favor with consumers, and it's being used for small purchases as well as major ones. According to an interview with an executive from Sears Holding Corp. (Kmart's parent company), a record number of Kmart shoppers are using layaway to purchase back-to-school items ranging from clothing to school supplies.

Discount clothing and home-goods retailer Burlington Coat Factory also reported a surge of interest in layaway payment plans. The strong interest in layaway, a practice that was looked down on in the age of easy credit, underscores the depth of the financial hardship in which many families today find themselves.

Unlike the recessions of the 1970s, though, today's layaway resurgence definitely has a 21st-century flavor.

The Tribune article reports that more people are looking for information about layaway when they surf the Internet. Plus, there are now online destinations such as eLayaway.com, a site that handles layaway transactions for more than 1,000 retailers. With online sign-up and payment schedules, it's a reinvention of traditional layaway. (It's possible that the anonymity afforded by sites like this one will increase the popularity of layaway even further, since they make the process palatable for customers who might otherwise be embarrassed by the idea of making the payments in person.)

Retailers are already worrying about what the future holds -- especially the make-or-break holiday shopping season. The Kmart exec interviewed by the Tribune says he's expecting layaway purchases to break records when holiday gift-giving time rolls around. Shoppers can expect other retailers to follow Kmart's lead and start promoting installment payment plans. From a business point of view, it makes sense: They'd rather get your money a little bit at a time than not at all.

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