Wal-Mart Ends Layaway Service

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

Layaway started after the Great Depression as a way to help customers buy the products they needed -- and to help businesses move their merchandise, he said. But as credit became increasingly accessible and goods became more plentiful, layaway fell by the wayside.

Tod Marks, senior editor at Consumer Reports, said layaway was a boon to shoppers.

"Instead of instant gratification, [layaway plans] basically force you to save toward something," he said. "In our gotta-have-it-now society, we've moved away from that."

Instead, companies have moved toward credit card incentives to encourage shoppers to spend.

"Our complete mind-set about the purchase and acquisition of products has changed," Marks said.

Those inducements include offers to buy now and delay interest and payment until months later-- in other words, the opposite of layaway plans. Wal-Mart has a similar offer and in addition has instituted a $20 cash-back incentive for those who spend at least $100 on a new Wal-Mart or Discover card when they open the account at the store.

Butler said the end of layaway at Wal-Mart is unlikely to affect sales. Blakley said that she did not know how many customers used the program but that the number had been steadily shrinking.

"It has not been a major line of business for any retailer that even still does it," Butler said.

But layaway is not dead yet. Three years ago, Rob Holland started Lay-Away.com after realizing that he didn't have the money to buy a computer during college. Today he manages the site full-time from his home in Chicago, selling everything from appliances to electronics.

"I used to be the same customer that most of my customers are today: low income, horrible credit," he said. "We're a viable alternative to those customers."

And now, Holland added, his company might just pick up a few Wal-Mart shoppers.