Layaway plans gained popularity after the Great Depression, offering consumers a way to purchase items without immediate cash. The layaway plan allowed customers to pay a deposit on an item that would be “laid away” or put into safekeeping by the retailer and later pick it up once they fully paid for it. In the 1980s, credit cards became widespread and offered instant gratification. The difference between credit cards and layaway plans is that although the consumer still had to make monthly payments, they could take the product home when paying for it with a credit card. The downside was the potential for interest payments if not paid off in full. In 2006, Walmart got the ball rolling by discontinuing its layaway service, citing decreasing demand and rising costs to manage the program. While some retailers — like Burlington Coat Factory, Kmart and Sears — still offer layaway service, it’s generally seen as a dying approach to retail sales. Buy now, pay later is the new version of the old layaway plan, but with a modern twist: the consumer gets the product immediately but gets the debt immediately too. The important thing to remember is to read the fine print. Consumers need to be aware of what they’re getting into.
