Layaway is not Dead! Off Price retailers that don’t offer layaway plans are driving customers to their competitors.

Layaway is not Dead! Off Price retailers that don’t offer layaway plans are driving customers to their competitors.

April, 25th 2011

By Les Tepper

For those not familiar with how layaway works, here is a brief explanation and history lesson. Layaway is a form of retail purchasing that became popular in the early 1900s. Layaway is a way to purchase an item without paying the entire cost at once. However, rather than taking the item home and then paying the debt on a regular schedule, as in installment plans, the layaway customer does not receive the item until it is completely paid for.

I have read that the crumbling economy has sparked new interest by many retailers to offer layaway plans again. Burlington Coat Factory, Kmart, Marshalls, TJ Maxx, Max10 Family Fashions, AJ Wright, Sears, Footlocker, Cato, BigDeal$ Family Fashions, Best Buy, Dress Barn, and Toys-R-Us, just to name a few, now offer layaway plans. WalMart does not find it necessary to offer layaway.

I have owned, operated and been involved with Off Price Apparel stores for over 40 years. The majority of these stores have catered to middle and low-income  customers. From day one I recognized the need for a simple to understand and operate layaway plan.  We promote our layaway plan with rack signs offering Free layaway on any item for up to 30 days with only a 20% deposit.  When customers enter the store our sales associates welcome them and tell them about our layaway plan. We don’t believe in keeping it a secret.

A customer friendly layaway program will build customer loyalty. Your sales associates will recognize the “layaway” customers constantly coming in to see new items, so they won’t miss out on anything. The “layaway” customer will be telling their friends about your store and how easy it is to take advantage of the values you offer.

I have found that over 90% of products on layaway end up leaving the store once the customer has reached full payment.  The other 10% are given a store credit when they change their mind about the product they put on layaway.

“Layaway” customers normally don’t shop a season ahead, therefore in January we offer 60 day extended layaway on spring items. You can find many reasons not to have a layaway program:

  • Layaways will take up too much room to store.
  • They are too time-consuming to administer.
  • They may be a burden to cashiers.
  • They are labor intensive

These are not good reasons.  These are just EXCUSES.  Your “layaway” customers will help make your business a success.