Toys R Us revives layaway for big-ticket items this holiday shopping season
Filed under: Company News, Economy, Sears Holdings Corp., Wal-Mart Stores, Target Corp.
Toys R Us Inc. has thrown down one more challenge to its rivals this holiday season by announcing it will offer layaway on its more expensive items. That combines two hot shopping trends: the comeback of layaway and the bare-knuckle fight for toy sales. The privately-owned toy chain, which is being investigated for anti-competitive practices by the FCC, will offer layaway on big-ticket toys such as bikes, dollhouses and gym sets, and electronics such as karaoke machines and televisions. Its Babies R Us stores will also offer layaway on some infant and toddler items such as furniture, car seats and strollers.
Putting an item in layaway will require a 20 percent deposit and carry a $10 service charge, plus a fee for canceled orders that varies by state. The merchandise will be available seven to 10 days after the final payment; the company says Christmas gifts will have to be paid off by Dec. 6 to be picked up before the holiday.
Offering layaway on higher-priced items is a smart move, because it's an area where competition is not as intense. Stores are in an all-out war to get their share of stagnant holiday sales, and toy retailers are falling all over themselves to cut prices this season, realizing that there is no hot toy to drive sales. Wal-Mart Stores Inc. (WMT) fired the first shot by extending its list of $10 toys, a move that was quickly followed by Target Corp. (TGT).
But while $10 toys may drive traffic into stores, they don't pay the bills; margins on the big-ticket items are better. As National Retail Federation Vice President Ellen Davis said during the group's recent holiday forecast: "If you're selling 1,000 toys under $10, you'll have to sell a lot of toys to make up for the $1,000 flat screen [TV] you sold last year."
Layaway has been making a strong comeback in these tight-money, tight-credit times. Toys R Us CEO Jerry Storch acknowledged as much in the announcement, stressing how layaway will give shoppers a chance to pick gifts while the selection is good and stretch out payments.
"The program offers added convenience and flexibility, providing customers another option for budgeting their holiday spending," he said in a statement.
Layaway was already rising in popularity since last winter, and peaked during the back-to-school shopping season as cash-strapped parents put all sorts of school supplies and clothing on layaway.
The service has become a strong marketing tool going into this holiday season, especially for Sears Holdings Corp., (SHLD) which is offering the service in both Kmart and Sears stores. Kmart announced in September it would even offer layaway on its website.
Sears, in particular, is a worry for Toys R Us, because it announced this summer it will relaunch toy departments in some of its stores, decades after it exited the business. Meanwhile, Wal-Mart, the largest toy retailer in the country, eliminated layaway a few years ago, and thus far has shown no interest in bringing it back.
Why is Oprah going to cable? Hint: It's nothing to get teary about
Kisses from Hershey: Candymaker may court Cadbury with $17 billion bid
D-Day for Harry Reid: Can he wrangle 60 votes for Senate health reform bill?
Reader Comments (Page 1 of 2)
10-20-2009 @ 6:40AM
gabriel phillips said...
Toys R Us is one of the best stores and correct place to get toys and games for your child.
Reply
10-21-2009 @ 9:35AM
Mike said...
Do you work for TRU corporate or something??? Toys R Us is a horrible, overpriced store with a limited selection of stuff that they have exclusive distribution rights on (which is why the FTC is investigating this den of theives). "Correct" place to get toys and games?? What the hell does that mean? I wouldn't shop at Toys R Us if it were the only toy store in town.
10-21-2009 @ 8:58AM
Chris said...
Why do you have to wait 7-10 days to get your paid item? Why can't you take home your item the day you pay the layaway off?
Reply
10-22-2009 @ 12:19AM
Ian said...
The items aren't kept in the store; they're kept in the warehouse.
10-21-2009 @ 8:42AM
Jenn said...
You can't layaway any video games, gaming systems, accessories or any other electronics. That is what I was told last weekend! That was the whole reason I went to T~R~U. What a dissapointment. Kmart lets you layaway anything!!
Reply
10-21-2009 @ 9:26AM
Nikki said...
Toys r us is going all out alright, they announced that they are forcing their employee's to work on Thanksgiving !!!
I wonder how many of those people who made that decision will actually spend their Thanksgiving in a store surrounded by strangers instead of being home with their families on one of the few traditional holidays still hollowed by our nation.
Reply
10-21-2009 @ 10:07AM
Melissa said...
I wonder if they products aren't actually on hand when laid away? That's the only reason I can think of that you would have to wait 7 days to get something you already paid for?
Reply
10-21-2009 @ 10:24AM
sonya said...
This really makes me madd. Walmart makes billions of dollars and wont bring back layaway in these hard times. I have been with out a job for over a year now had to declare bankrupt and still struggling to pay every thing. Yes Kmart offers layaway but I live in Texas and the nearest one is like nearly 200 miles away. Toys R us is over priced and Target never has offered a layaway. I have three kids and I dont know what to do. Guess there are alot of people in the same boat. Best wishes to everyone. Just got to have faith in the man above.
Reply
10-21-2009 @ 4:51PM
paul said...
You don't know what to do without a store that gives you a layaway plan? Are you serious? How about a savings account? How about putting it under your mattress? How about paying for things with a check or cash? How about only buying things you can afford and making some sacrifices on things you can't?
It's people like you that make Americans look like financial illiterates.
10-21-2009 @ 6:31PM
Danielle said...
Paul, you really have to understand something. She's just wishing that Wal-mart would offer layaway. Layaway allows you to pay for things a little at a time, so that it's easier to afford. Evidently you've never tried to do layaway, since you believe that you actually have to afford to pay the full price to begin with. It's a system that allows you to save up and eventually buy items.
10-21-2009 @ 6:41PM
mama said...
You might want to think about homemade gifts this Christmas season....I'm just saying
10-21-2009 @ 10:19PM
lilred said...
Sorry to say this, but who cares if Wal-Mart doesn't offer lay-a-way any more. Why should this make you mad? You too shall live through it. Do you think just b/c Walmart has lots of money "as u say" it should offer this? There are other stores that offer the layaway plan so go there. If you can't afford it, I guess you shouldn't buy it-plain and simple. It's very sad that people place blame on others b/c they can't have certain things their way. Noone said life was suppose to be easy. Life isn't suppose to revolve around you. Shame on Wal-mart for not offering layaway. Think rashionally people and good luck!
11-18-2009 @ 11:53AM
Kindness? said...
WOW~ The Scrooge's are coming out already. Have some compassion, people. She said she was without a job. Some people need a little help. Stop being so judgmental and learn to spell!
10-21-2009 @ 11:15AM
Brandy said...
At least when you go to a Toys R Us store you can actually find someone who knows what they are talking about instead of finding no one available to help you. And the reason you have to wait for the layaway items is because they are stored at the warehouse since most stores don't have the extra room for such large pieces. Walmart makes their employees work every holiday! How is the fact that TRU is doing the same thing to be competitive any different or wrong?! It's tough out there right now and I can understand why they are doing what they are doing to keep afloat and their people employed. If you have a problem with that then keep going to Walmart where they could give a damn about their customers!
Reply
10-21-2009 @ 11:23AM
ray said...
What a joke, the whole reason to lay something away is because (choice or not) is to save the item at a price / or limited avaiability at which time you don't have all the money at one time to pay for the item (s). There should be NO restrictions
Reply
10-21-2009 @ 11:34AM
dora said...
Some Best Buy stores have layaway and I hope they continue it. Payoff by Dec. 6, I won't even get paid until Dec. 18. Plan ahead if your using their layaway. Sounds like a waste of time.
Reply
10-21-2009 @ 11:43AM
Diana said...
We spent over an hour yesterday scooping up toys for our kids to put on layaway. When we got to the counter we were told that it is for big ticket items only. What the hell is that. So OK we put the little ticket items back which by the way nothing was less then $20 and the total would have been well over $400 but whatever. So we go to put our one so called big ticket item on layaway and after they get all my info entered in the computer I am told that it does not meet the $100 min purchase. The only place that the terms of there policy was in a small pamphlet by the register. And yes I will be doing my shoping @ Kmart. Whats the point of layaway if it still only benefits to people with a ton of money.
Reply
10-21-2009 @ 1:17PM
penny said...
Back in September I asked Toys R Us if they had layaway, & they said no. So I went to K-Mart where they did have it. I got everything I was looking for & asked for & got help when I needed it. The only things you can't put on layaway was clearance items, which was no big deal. Too late for you TRU. Next year I will go back to K-Mart.
Reply
10-21-2009 @ 1:44PM
Sherry said...
Their self-serving marketing tactic is completely inconvenient for the customer by having only certain items acceptable for layaway. What's the point? Obviously, just to drag people into the store. Support small local business instead people!!!
Reply
10-21-2009 @ 2:24PM
Trever said...
Talk about lousy customer service. Layaway is a great idea. You get to make payments and the kids won't find the presents. But, they completely missed the boat my charging for the service. Then, charge even more money if you can't afford to finish paying your layaway purchases off. Typical of a store like Toys-b-Them. Overpriced and lousy service. Where's the nearest Wal-Mart???
Reply