Walmart, Toys R Us and Sears announced in August that they would begin lowering and waiving layaway fees. The Texas-based H-E-B also launched its first free layaway program for items such as toys and electronics, My SA reports.
Sears and Toys R Us eliminated their layaway fees this year. Walmart said that customer demand led the company to reduce its cost to $5, which is refunded as a gift card after consumers pay off their balances.
Bill Simon, the president and CEO of Walmart, said that, by Oct. 10, customers had placed $400 million worth of purchases into layaway.
“That’s basically over half of what we had in layaway all of last year, and we didn’t start last year until the middle of October,” Simon said, according to My SA.
Katie Reczek, a spokeswoman for Toys R Us, said that the increase in layaway orders over the past year is a “testament” to how the company’s free layaway program appealed to consumers, adding that the average value of a layaway order at the store is approximately $200.
While the stores are reporting positive reactions to changes to their layaway programs, a recent survey by BIGinsight revealed that consumers had little interest in the service. Only 12.3 percent of holiday shoppers indicated that they used or planned to use the service, a slight decrease from 12.7 percent in 2011, My SA reports.
Another survey by the CFI Group found that two-thirds of the shoppers polled were less likely to use layaway as compared to last year.
“With a flatlining number of consumers boarding the layaway train for 2012, it appears that this Great Depression-era policy is more bygone gimmick rather than a modern-day marvel,” Pam Goodfellow, the director of consumer insight for BIGinsight, said, according to My SA.
Deborah Fowler, an associate professor of retail management at Texas Tech University, said that the survey results and consumer behavior may be in conflict because shoppers prefer to keep their financials private, adding that layaway’s appeal does not cater to a certain economic demographic.
“Layaway is wonderful for shoppers, because either they don’t have credit [or] they’re trying to avoid paying interest,” Fowler said, My SA reports. “Even if the store charges a small fee, it’s not going to be as much as layering more debt on the credit card.”