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Thread: Layaway v/s Credit Cards

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    Layaway v/s Credit Cards

    When I was growing up, my mother used to buy our clothes at a local department store and used the “layaway” method to purchase them. She would make cash payments to the store’s accounts dep’t each month until the clothes were paid for and then we’d go get them in happy anticipation! It was an event and I remember it fondly. I doubt my parents even had a credit card back then and as far as I know they paid for most things either by saving money or via the layaway method.

    Then as time went on, it seemed as if everyone had a credit card and I stopped seeing offers of layaway in stores. It became a thing of the past. I noticed about a year or so ago that I’m beginning to see offers of layaway plans in some stores again. Assuming it’s the economy in some way responsible for this reversal, why? I was too young to know or care about the financial ins and outs of the system so I don’t know if my mother paid any interest in using the layaway plan or if the stores benefited simply by offering it as an option, thus gaining business.

    Has anyone else noticed this trend? Am I seeing a few isolated cases and allowing some form of financial nostalgia to creep into my perspective? Or are practical plans such as layaway coming back into vogue? Maybe some of you who are more savvy with financial trends can help me out with this! Financial aspect aside, does anyone else have happy childhood memories of picking up purchases after they had been on layaway?

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    Re: Layaway v/s Credit Cards

    I don't remember my mother using a credit card either, she usually waited till she had enough money and then wrote a check.

    Logistically speaking, I would imagine layaway is a lot more costly for the store since they'd need a separate storage area that adds onto the utilities bill and more employees that would man the area and keep the records. I don't see many stores that actually care enough about the customers to go to the bother. Interestingly, one of the stores that I recall still having layaway was K-Mart. This was a while ago and I don't know if they could afford to do it now since WalMart has taken over the world.

    Remember going shopping for school clothes? That was fun although my mom made an entire day out of it and I ended up getting cranky.

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    Re: Layaway v/s Credit Cards

    Yesssssss, I do remember! It was an event! The same with buying summer clothes which probably held more appeal to me because it meant no school! And Easter outfits too. I was pretty much okay with whatever my mother bought me but my sister was a few years older and she had to try on everything before making her decision. That got a little boring!

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    Re: Layaway v/s Credit Cards

    kmart started advertising lay away for christmas around Halloween. Sears, who own kmart started advertising it a couple of weeks later. Now walmart has picked it up. Kind of late in the season if you ask me.

    I think that most of my school clothes were bought using a lay away plan.
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    Re: Layaway v/s Credit Cards

    The equivalent here was the slate.

    From the way you've described Layaway it is a pre-payment system where you pay for the goods by installments and only when they are fully paid for do you collect them. If this is the case then, far from paying interest to the merchant, the merchant should be paying you interest - it is not a cost to them it is a benefit as the money is in their account early.

    Those that could afford to do so would have jam jars in the pantry - so much in here for the rent, so much in here for the coal and what wasn't spent on food went in the "rainy day pot" for when the kids shoes wore out.

    The slate was the opposite - when you couldn't afford the food then the price was added to the slate and you'd clear the balance come payday. Usually with no interest because the grocer knew it would be the straw that broke the camel's back.

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    Re: Layaway v/s Credit Cards

    Quote Originally Posted by Bryn Mawr View Post
    The equivalent here was the slate.

    From the way you've described Layaway it is a pre-payment system where you pay for the goods by installments and only when they are fully paid for do you collect them. If this is the case then, far from paying interest to the merchant, the merchant should be paying you interest - it is not a cost to them it is a benefit as the money is in their account early.

    Those that could afford to do so would have jam jars in the pantry - so much in here for the rent, so much in here for the coal and what wasn't spent on food went in the "rainy day pot" for when the kids shoes wore out.

    The slate was the opposite - when you couldn't afford the food then the price was added to the slate and you'd clear the balance come payday. Usually with no interest because the grocer knew it would be the straw that broke the camel's back.
    Yup, about the same as lay away.

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    Re: Layaway v/s Credit Cards

    Quote Originally Posted by YZGI View Post
    Yup, about the same as lay away.
    OK, thanks, looks like I misunderstood the OP.

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    Re: Layaway v/s Credit Cards

    Quote Originally Posted by flopstock View Post
    kmart started advertising lay away for christmas around Halloween. Sears, who own kmart started advertising it a couple of weeks later. Now walmart has picked it up. Kind of late in the season if you ask me.

    I think that most of my school clothes were bought using a lay away plan.
    Minor point.
    KMart, or rather its owning entity, bought Sears.

    Layaway was popular at WalMart for a while, but they discontinued it a few years back.
    I think, now that KMart has started doing it again, many of the retailers will pick it back up, rather than lose sales to the competition.

    A friend at WM told me that the main problem was the logistics of storing all the merchandise.
    This is not so much a problem anymore with the delivery systems in place. Part of the agreement specifies delivery or pick-up date. The product can be delivered to the buyers house, or to the local story for pick-up with 48 hours notice.
    It may not be so much that I've conceded your point as that you just can't hear me rolling my eyes.

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    Re: Layaway v/s Credit Cards

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    Quote Originally Posted by tabby View Post
    When I was growing up, my mother used to buy our clothes at a local department store and used the “layaway” method to purchase them. She would make cash payments to the store’s accounts dep’t each month until the clothes were paid for and then we’d go get them in happy anticipation! It was an event and I remember it fondly. I doubt my parents even had a credit card back then and as far as I know they paid for most things either by saving money or via the layaway method.

    Then as time went on, it seemed as if everyone had a credit card and I stopped seeing offers of layaway in stores. It became a thing of the past. I noticed about a year or so ago that I’m beginning to see offers of layaway plans in some stores again. Assuming it’s the economy in some way responsible for this reversal, why? I was too young to know or care about the financial ins and outs of the system so I don’t know if my mother paid any interest in using the layaway plan or if the stores benefited simply by offering it as an option, thus gaining business.

    Has anyone else noticed this trend? Am I seeing a few isolated cases and allowing some form of financial nostalgia to creep into my perspective? Or are practical plans such as layaway coming back into vogue? Maybe some of you who are more savvy with financial trends can help me out with this! Financial aspect aside, does anyone else have happy childhood memories of picking up purchases after they had been on layaway?
    It's a matter of interest actually and the age old economic thought that supply dictates demand i'd think.

    Quote Originally Posted by Bryn Mawr View Post
    The equivalent here was the slate.

    From the way you've described Layaway it is a pre-payment system where you pay for the goods by installments and only when they are fully paid for do you collect them. If this is the case then, far from paying interest to the merchant, the merchant should be paying you interest - it is not a cost to them it is a benefit as the money is in their account early.

    Those that could afford to do so would have jam jars in the pantry - so much in here for the rent, so much in here for the coal and what wasn't spent on food went in the "rainy day pot" for when the kids shoes wore out.

    The slate was the opposite - when you couldn't afford the food then the price was added to the slate and you'd clear the balance come payday. Usually with no interest because the grocer knew it would be the straw that broke the camel's back.
    Quote Originally Posted by Bryn Mawr View Post
    OK, thanks, looks like I misunderstood the OP.

    No misunderstanding actually

    On a side note I've been searching for the best copy of "Wealth of Nations" if you know of it...

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