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If you are old enough, you may remember pressing your face against a shop window, eyes wide, fantasizing about the wonderful things you could do with that shiny red bicycle or that set of electric trains or that ornate dollhouse.

You may also remember that credit wasn’t used as freely as it is today. When begging and whining failed to achieve immediate results, the only way to get the cherished item was to wait several months as payments were made toward the purchase on something called the “layaway plan.”

As the Great Recession drags along and as credit card customers grow increasingly tapped out, a number of retail outlets are resurrecting the layaway purchase option that gained favor during the Great Depression and remained popular for decades.

Layaway’s old, simple idea

The layaway plan consists of a down payment, manageable payments over time, no interest, no hit to your credit card, and no dings to your credit score. It’s just between you and the store. Stick with the plan, and the item is yours.

The latest advocate: Toys R Us. On Oct. 20, the nation’s largest toy and baby products retailer joined Sears, Kmart, Burlington Coat Factory, T.J.Maxx, Marshalls and several other national and regional outlets in offering old-fashioned layaway plans, in some cases with newfangled bells and whistles.

“We understand that many gift givers are carefully watching their budgets this holiday season and layaway offers convenience and flexibility by allowing customers to make a series of small payments over time,” said Jennifer Albano, a spokeswoman for Toys R Us.

She said the company tested the plan in select stores during the summer and found that it connected with shoppers.

Under the program, which is similar to most layaway plans, Toys R Us shoppers lay down a deposit of 20 percent of the purchase price (including taxes) and a $10 service charge. Then, they can make additional payments at any time they like and as frequently as they like.

Toys R Us says the merchandise will be made available within 10 days of final payment — a bit of a departure from most layaway plans, which tuck away particular items for customers and hand them over immediately upon final payment. Refunds are available for canceled orders at Toys R Us, though there is a $5 fee.

Delayed gratification re-emerges



At the heart of all layaway programs is the concept of delayed gratification, something of a new concept for many Americans more familiar with impulse buying and the instant buzz it delivers.

Economic hardship, the overall credit crunch and the increasingly regressive and repressive policies of some credit card companies are taking their toll on the use of credit.

Earlier this month, the Federal Reserve reported that credit card balances plunged by $10 billion in August, the 11th consecutive month of decline.

“People seem to be rethinking whether they really want to take on more debt, even if they have available credit,” said Devanie Angel, who runs the LayawayPlans.net website, which offers a variety of information about the process.

“Shoppers who may have thought of layaway as something for people who couldn’t get credit or were just not good at planning or managing their money are now seeing the wisdom of a system that forces you to plan ahead and avoid impulse purchases,” she said.

Angel said her year-old website is seeing a 10-fold growth in visitors lately, an increase that seems to be building as the holiday gift season approaches.

“The tone seems to be more serious,” she said. “I think people who never would have considered putting something on layaway — they’d just charge it — are giving the concept serious thought when it comes to holiday shopping, school clothes and gear for their kids and even regular household purchases.”

People seem to be rethinking whether they really want to take on more debt, even if they have available credit. Devanie Angel, LayawayPlans.net

Signs of resurgence

The popularity of credit cards nearly killed layaway in recent decades. In a turnabout, cards’ sudden unpopularity is helping to nurture layaway’s return.

The resurgence of layaway began gaining momentum last year, as the economy tanked and Americans grew concerned over their mountainous debt.

Kmart alone reported 600,000 layaway customers during the 2008 holiday season. As a consequence, it sponsored summer and back-to-school layaway programs.

And, just a few weeks ago, Kmart and Sears added layaway components to their online sales operations.

“We have an entire generation of customers that grew up shopping online,” said Mark Snyder, Kmart’s chief marketing officer. “Launching online layaway at Kmart engages these customers by allowing them to spread their payments out over time and better plan their spending.”

Company officials said their research showed that Web searches featuring the word “layaway” more than doubled between August 2008 and August 2009.

“Direct input from Sears and Kmart consumers was a key driver in our decision to launch online layaway,” said Shannelle Armstrong, director of public relations for Sears Holdings, which owns both retail chains. ”

“Online layaway is a reflection of Kmart and Sears being responsive to customer needs and nimble in these tough economic times,” she said.

Layaway programs offer certain obvious benefits not only to shoppers who now have another way to make big-ticket purchases, but also to retailers.

For instance, if the customer stops making payments or otherwise cancels the deal, the store can simply return the item to its for-sale inventory. (Also, from the consumer’s standpoint, a deal gone bad does not tarnish any credit report.) And if the transaction goes through, as the vast majority do, the retailer avoids credit card transaction fees.

Online layaway is a reflection of Kmart and Sears being responsive to customer needs and nimble in these tough economic times. Shannelle Armstrong, Sears Holdings

Read the fine print

Layaway has its shortcomings. “If you choose to use layaway, be sure to examine the layaway contract carefully before committing to it,” Angel said. “Make sure the terms — including deposits, fees and payment intervals — are acceptable to you.”

The Federal Trade Commission offers layaway tips for consumers and for companies.

Still, it’s clear that layaway programs are reporting for duty for another spin around the retail block.

“The holidays should be a time of celebration and connection with family …,” said Armstrong, the spokeswoman for Sears Holdings. “Layaway is a great option to manage your time and your budget.”

Said Angel: “While in a perfect world, everyone would just save up for what they need or want, layaway is an increasingly realistic option in a time of economy uncertainty, layoffs and shoppers just being more cautious about when and how they spend their money.

“I won’t be surprised if more retailers jump on board or resurrect their layaway programs.”

See related: 10 questions to ask about layaway plans, Layaway enjoying small revival for the holidays, Credit card balances plunge by $10 billion in August