So, a growing number of shoppers and retailers are turning to an old concept that's becoming new again -- layaway.
It's look at as a help for retailers and consumers alike nervous about the upcoming holiday shopping season.
Financial journalist and early showcontributor Vera Gibbons explained the ins-and-outs of layaway on the show Monday:
She says layaway got popular during the Depression, became mostly passé in the 1980s, but is seeing something of a resurgence in today's rough financial waters.
Layaway used to be available anywhere and everywhere but, as credit became cheap and easy, Americans began relying on credit cards, and layaway more or less went away.
Now, with credit and credit cards getting harder to come by, and more expensive -- with consumers up against lower limits on credit cards and high fees and interest rates -- and just generally being tapped out, riddled with debt, and determined not to take on more -- interest in layaway has been renewed.
Though layaway programs all work a little differently, generally, you put the item you want on hold, along with a deposit, often 10 percent of the purchase price, and the item becomes yours when you finish paying for it. Some items, such as clearance or super-sale items, don't qualify.
You make small payments over set period of time. They might be weekly, biweekly, monthly, whatever; the store holds the item as collateral.
And there are no interest charges. Just make sure you stick to your payment plan.
Layaway makes financial sense for those with limited access to credit, those who carry balances on credit cards, and for those who want to opt out of our "buy now, pay later" culture. It forces consumers to budget. And it's a clever way to attract holiday shoppers.
Layaways overall only account for a fraction of sales, but that definitely gives retailers a leg up on the competition during this make-or-break fourth quarter.
Beware: Stores typically assess service fees for setting aside merchandise (about $5) and cancellation fees (which range from $10 up, to $35 and higher. Check with the retailer.
The largest retailer to offer layaway service, Wal-Mart, phased it out in 2006. Now Wal-Mart only offers layaway on jewelry, and apparently has no plans to bring it back, though that could change. But K-Mart is making a big layaway push. Sears and Marshalls have layaway programs, and the concept has certainly been resonating well with shoppers.
The Web is also getting into the act, at such sites as laymeaway.com and elayaway.com. They say lots of people have been signing up, and they're seeing a nice bump in business. You register (all you need is active checking account), and you shop -- any number of categories, with thousands of merchants. Other brand names involved include Gap, Apple, Adidas, Burlington Coat Factory, and Dillard's.
You set up your monthly payments; you can have the funds automatically deducted from your checking account. And after making the last payment, an item or items are yours.