Wal-Mart Ends Layaway Service

Like many other lower-priced chains, Wal-Mart Stores Inc. is abandoning layaway in favor of delayed-payment plans.
Like many other lower-priced chains, Wal-Mart Stores Inc. is abandoning layaway in favor of delayed-payment plans. (By Chris Greenberg -- Bloomberg News)

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By Ylan Q. Mui
Washington Post Staff Writer
Friday, September 15, 2006

Wal-Mart Stores Inc., which built an empire serving low-income customers, said yesterday that it was phasing out layaway, the plan that allowed generations of shoppers to put a purchase on hold until they could afford it.

Though Wal-Mart is not the last retailer to offer the service, it is the largest. And its decision is another reminder that living within your means is becoming an outdated concept in today's buy-now-pay-later culture.

"Layaway at Wal-Mart was something that they did as a courtesy to the customers," said Daniel Butler, vice president of merchandising and retail operations at the National Retail Federation, an industry trade group. "The layaway process has really become very obsolete."

Wal-Mart said demand for the service has dropped off, as consumers increasingly rely on credit cards and gift cards to pay for purchases. The idea of waiting to complete a purchase is no longer attractive. Wal-Mart said shoppers will have until Nov. 19 to put items on layaway and must pick them up by Dec. 8.

"It's really a matter of people turning to different types of payment options, and people wanting to take it home today," said Linda Blakley, a Wal-Mart spokeswoman.

Blakley said that none of the two dozen stores the retailer opened in August had layaway departments, and that business was not affected.

Several retail chains still offer layaway plans. Mid-price department store Boscov's Inc., a regional chain based in Reading, Pa., offers a 30-day plan for apparel and a 60-day plan for all other merchandise. Customers must put down 10 percent of the price, with a $5 minimum.

"We're pretty lenient with it," said Justin Horst, an assistant store manager. "If someone's continuing to make payments with it, even if they go beyond their 30 or 60 days, if it's an active account, it's pretty much okay with us."

Horst said that the program is especially attractive to older shoppers and that he gets questions about it daily.

Sears, Roebuck and Co. and Kmart, both subsidiaries of Sears Holdings Corp., also offer layaway programs. Kmart's eight-week plan comes with a $5 fee and requires shoppers to pay a 10 percent deposit with a $5 minimum. Sears's plan applies only to fine jewelry and big-ticket promotional items such as TVs, washers and dryers; it extends up to 90 days.

Circuit City Stores Inc. discontinued its layaway program two years ago due to lack of customer demand, a spokeswoman said. Best Buy Co. also does not have a layaway plan, nor does Target Corp.

"It is something that really for most retailers had gone away a long, long time ago," Butler said. "It's even surprising to me that the companies you name still have it."

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