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Layaway gone the way of the horse and buggy
By Kathleen Dayton
Staff Writer
One of retail’s oldest purchase plans is bowing out of department stores across the nation.
Layaway is going away.
Wal-Mart announced in September that it would phase out its layaway program as it expands other financing options for customers. The company already has zero interest offers for six and 12 months for Wal-Mart credit card users. New applicants for Discover or Wal-Mart credit cards are also getting cash-back incentives.
“Demand for layaway service has declined steadily as consumers turn to other options, such as online shopping, gift cards and no-cost credit alternatives,” said Pat Curran, executive vice president for store operations for Wal-Mart’s Stores Division.
Wal-Mart customers have until Nov. 19 to place items on layaway and all layaways must be picked up by Dec. 8.
Wal-Mart spokeswoman Marissa Bluestone said the company’s research also showed that a large percentage of customers were using layaway for storage. Customers who wanted to hide holiday gifts from family members, for example, would put them on layaway.
“Overall, the reasoning behind this is that our customers are continuing to embrace the different payment options that were not available when layaway was first introduced,” Bluestone said.
Scott Krugman, spokesman for the National Retail Federation, said few retailers use layway any more.
“We’re an instant gratification society,” Krugman said. “If people are going to pay on the product, they’d just as soon pay interest and use the product immediately.”
The layaway system also took up employee resources that could best be used elsewhere, Krugman said.
“Those people are more needed elsewhere in the store,” Krugman said. “They need them on the sales floor. They need them at the register.”
T.J. Maxx is one of the few Charleston area retailers still offering layaway, store officials said.
Marc Tarokh, merchandising manager for Stein Mart in Mount Pleasant, said his company phased out layaway more than a decade ago.
“Layaway is a story of the past,” Tarokh said. “It’s a pain and not too many people like it.”
Among the problems with a layaway program were additional paperwork and having to use at least two store employees to staff the layaway department, Tarokh said.
“Nine out of 10 times, people never came back to pick up the merchandise,” he said. “I was so glad we got out of it.”
Seasonal changes were also a problem. Garments left on layway for months might have to be marked down before going back on the rack as out-of-season merchandise.
“So the company loses money,” Tarokh said. “Not only that, but you have the issue of losing the merchandise behind the counter. We have enough headaches that we don’t need layaway.”
Kathleen Dayton is a staff writer for the Business Journal. E-mail her at kdayton@charlestonbusiness.com.
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