'Tis the season to buy now, pay later
The holiday season brings familiar sights: Santa posing for photos with children, decorations of red and green, and shoppers standing in line to buy their gifts on the layaway plan.
For some customers, the once-popular way to purchase presents that made a comeback in recent years is the only way they can buy what they really want.
Through some careful budgeting, Burtonsville resident Naomi Payne was finally able to take home a Nintendo Wii video game console last week that she had put on layaway at Kmart.
"This is my Christmas present to myself and my family," she said as she wheeled her cart away from the layaway counter at the Aspen Hill store Nov. 25.
While each store has its own program, layaway usually requires customers to sign a contract, make a down payment on the item and then pay for it in small installments over time.
"I think layaway is great," Payne said, adding she has taken advantage of layaway at other stores in years past. "If you want it and you can't afford it all at once, you can pay for it over time."
Bill Hurlock, a manager at the Aspen Hill Kmart, said Kmart has offered a layaway program in its stores for many years, but this is the first year online layaway has been offered. He noted that while the store offers layaway year-round, its popularity always increases around the holidays.
"We started getting a lot of customers in October this year and it's been building up ever since then," Hurlock said, adding the store does not keep track of how many people use layaway.
Some of the most popular layaway items this year have been toys, electronics, gaming systems and furniture, Hurlock said.
He noted he thinks it is wise for customers to take advantage of layaway.
"I think people should use it because of the economy and just the great opportunity that you can guarantee you get the right items that you're looking for," Hurlock said. "That way, you're not at the last minute looking for the thing that you saw two months ago."
Silver Spring resident Dolores Davis also picked up some of her layaway items last week. Her cart was dominated by a TV, toys and clothes and she vowed she would return soon to pick up the rest.
"Layaway helps," she said, "especially when you don't have all kinds of money to put down at once."
John Shea, an associate professor of economics at the University of Maryland in College Park, said the fact that layaway is coming back is not a good sign for the economy, but is a good thing for families in the long run.
"It's not a great way to buy something because it's like putting money in a bank and not earning an interest," he said. "But overall, it's probably a good thing that households are being forced to save up to buy things rather than just put them on credit cards."
It is better than using credit since it keeps consumers out of debt, which is part of why the country is in a recession in the first place, he said.
"This is just something cash-strapped families would tend to do," he said. "If consumers aren't getting as much credit, which I understand they're not, layaway becomes a more popular option in a recession."
Jennifer Dorsey, who was shopping in the T.J. Maxx store in Olney on Nov. 25 with her children Karli and Cameron, had a shopping basket full of items, many of which she put on layaway.
The Olney resident said she has used layaway for more than half of her holiday shopping this year and began setting aside merchandise in October.
"I keep adding more and paying it off," she said. "It's really helped a lot."
Dorsey said she used Kmart's layaway program years ago and is using the program at T.J. Maxx for the first time this year.
"I am thinking that I should do it more often for things that I want for myself, and do it throughout the year, not just for the holidays," she said. "With the economy, it's just easier for families, and I am surprised that more don't use it."
Dorsey said she feels her merchandise is safe and has no concerns that it won't be there when she goes to pick it up.
"I haven't had any problems," she said. "I plan to have everything paid for and picked up by at least the week before Christmas."
Roland Basimo of Gaithersburg was also using the layaway service at T.J. Maxx last week.
"I use this all year, mostly at Marshalls and T.J. Maxx," he said. "If I see something that I like and don't have enough money, I use layaway, because if I don't, it might not be there when I come back."
Laura C. McDowell, manager of media relations and company spokeswoman for T.J. Maxx and Marshalls, said the Olney store has offered the layaway service since it opened in 2003.
"For those T.J. Maxx and Marshalls stores that offer layaway, it offers customers the opportunity to pay for purchases over a 30-day period," she said.
McDowell said a deposit of 10 percent of the total amount of the purchase is required along with a non-refundable fee, which typically is $5. Layaways must be picked up and paid in full within 30 days, she said.
Dornette Nickson, head of the men's department at Sears in White Oak, said she has no specific numbers to offer, but she feels customers are using her store's layaway program.
"Just by going downstairs and looking at the layaway packages that are down there, I do know that we have a lot of customers taking advantage of it," she said.
"It's just another way for customers to get the things they need without putting down a whole bunch of money at one time," she added. "It's convenient for them."
Staff Writer Nathan Carrick also contributed to this report.
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