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Layaway almost disappeared during the last economic boom. With easy credit and plenty of home equity to tap, many families no longer needed a pay-as-you-go way of making purchases.

But today, layaway is back. And in a big way.

Just this month, Walmart revived layaway after a five-year hiatus. Toys R Us expanded its program to include more items throughout the store. Other retailers have begun heavily advertising the service.

Layaway allows shoppers to select what they want to buy, make a "down payment" of some amount and have their merchandise stored at no interest while they make payments over a period of time, typically four to 12 weeks. After they make the final payment, the merchandise is theirs.

But as with anything, it pays to read the fine print.

Not all products can be put in layaway, and some stores require a minimum purchase amount. Although there is no interest charged per se, most programs do have various fees, such as a $5 charge to establish a layaway account and a $5 penalty if you cancel it before you pay for your merchandise.

It's important for consumers to factor in all the layaway fees, said Jennifer Rohn of credit counseling firm AAA Fair Credit Foundation in Salt Lake City. "For example, a $50 purchase put on layaway with a $5 service fee equates to a 10 percent increase in of the purchase price," she said.

And there's also the tricky issue of what happens if the item or items you have on layaway go on sale over the holidays. Because you're locked into a layaway contract at a set price, most stores won't make price adjustments for items set aside in layaway.

At most stores, if an item on layaway goes on sale, the consumer would have to cancel the layaway contract, pay the cancellation fee and repurchase the item at the sale price to get a deal.

Whether that's a wise thing to do depends on what you agreed to pay for the product, the sale price and the layaway cancellation fee.

Rohn said it's also important for consumers to understand penalties they may face when returning an item that was on layaway.

Retailers also vary in the length of time shoppers can have their items in layaway before making the final payment.

Kmart has a program that runs as long as 12 weeks. Walmart requires that final payments be made a week before Christmas, by Dec. 16.

Despite the added cost and restrictions of layaway, National Retail Federation data on consumer spending shows just why the service is so popular.

Since 2008, consumers have shifted more toward debit cards and cash to pay for their holiday purchases. Some of this shift is by necessity. Many cardholders have found their credit lines reduced or even eliminated.

It's also more difficult to get new cards, including those offered on the spot in department stores. As a result, last year the share of consumers who primarily used credit cards to purchase holiday gifts was less than one-third —the lowest level since 2002. The share of consumers using debit cards or cash last year rose to more than 40 percent.

Some shoppers also are electing to lay off credit cards as a way to build financial stability during tough economic times.

Still others find layaway appealing in the wake of higher credit card rates and a host of new fees for card users.

And there's another bonus. You won't have to worry that the items you want to buy will still be in stock by the time you have the money to buy them.

Lesley Mitchell writes One Cheap Chick in blog form at

Twitter: @cheapchick


Layaway programs

Each retailer's program is a bit different. Most stores charge at least $5 to set up a layaway account and another $5 if the account is canceled. Length of the layaway term and what types of products may be put in layaway also vary.

Walmart • The global retailer brought back layaway Oct. 17 after a five-year hiatus. Go to for more information.

Toys R Us • The toy seller has expanded the layaway program it introduced in 2009. Go to for more information.

Kmart • Go to and type "layaway" into the search field or go to

Best Buy • Go to

Burlington Coat Factory • It has one of the oldest layway programs. Information: