Layaway's Comeback for the Financial Crunch

There was a day when shoppers did not need schooling in layaway. (Sears' new ad explains it in 3 steps, as layaway makes a comeback for the financial crunch holidays.) That is, boomers grew up with the concept of paying for a product before taking it home, and then we invented credit cards, which might be called the takeaway model. Purchase, take home, use, and hope the object has a lifetime longer than the payments.

Buying on credit wasn't really invented by boomers, of course. For centuries, farmers and ranchers lived on credit—with the farm co-op and the mercantile waiting patiently for payment. In those days, merchants knew that money would come after harvest or market. Mortgages were sometimes handled the same way, except "harvest" meant you'd have the money someday after an elder died. What did you think "bought the farm" meant?

Layaway came in and out of fashion and today it carries a connotation of having bad credit (hence the requirement to pay for an item in full before taking it home) and that reputation probably hastened layaway's demise after credit cards became common. But the reputation doesn't tell the real story. I grew up knowing that:

• layaway permitted me to choose a particular item that might not be available a few months later because store shelves were stocked differently in those days,
• layaway gave me a safe place to put my money because bank accounts for children were rare in those days,
• and layaway was my way of keeping my money committed so that family members could not claim it. (It was an unusual household: all available money was to be spent as quickly as possible but debt was honored. And my layaway commitment was viewed as a debt that I had to tend.)
  

If I consider those childhood experiences from the 1960s, I can project what layaway must have meant to adults, especially women who might never open a bank account. A favorite fabric could be put on reserve. The store's cash register was safer than a coffee can for saving money. And by taking extra money to the store every week, a woman could prevent anyone else from squandering it.

Layaway was direct money management. And that's probably what it is today. My guess is that most of the people who are reviving layaway have credit cards in their wallets. They are choosing a different model that is more deliberate and more concrete. And just may help get them get through the holidays.

© 2008 Mary Bold, PhD, CFLE. The content of this blog or related web sites created by Mary Bold (www.marybold.com, www.boldproductions.com, College Intern Blog) is not under any circumstances to be regarded as professional, legal, financial, or medical advice. Or education advice. Or marital advice. Or even a tip.