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I was having dinner with my family last night and somehow we started talking about how they used to put things on layaway. For those unfamiliar with layaway, it was basically an extended payment program. You select the items you wanted to purchase but you didn't have the money to pay for them in full right then. The store would set the items aside for you and allow you to make small payments over time until the balance was paid in full. Once you were paid in full, you could take your items. The maximum time to keep something on layaway was up to 3-4 months. You were required to make payments weekly or biweekly to keep the account current.
Wal-Mart and Kmart were some of the most popular places to put things on layaway. Kmart still allows you to put items on layaway; but most of the stores have closed. Wal-Mart chose to do away with the layaway option in 2006 citing declining use and increasing costs. According to the companies website, the company phased out the layaway program as it was expanding its other financing options. (In order words, we want to cater to the customers need for instant gratification and charge them for the privilege).
You had the option of paying for your layaway in full at any time and getting your purchases. You also had the option to change your mind and get your money back, minus a small restocking fee. There were limits to items that you could put on layaway. For example, you were not able to put food items or clearance items on layaway.
When I was growing up, my mother used the layaway program to purchase my Christmas presents. She would select all of the items she wanted to get me a few months before Christmas and then put them on layaway. The store would then hold all my toys and any other items and allow her to make small, interest free, payments until the balance was paid in full.
In light of the current economy, I think they need to bring back the layaway program. Of course, you could always have your own layaway program. Simply save money in a separate account until you can pay for your desired purchase in full.
Image Credit: Jetheriot