Wal-Mart offering layaway service for holidays

Wal-Mart Stores Inc. is bringing back its layaway program for the key holiday shopping season.

The nation’s largest retailer said Thursday that it was reinstating the service, which it had discontinued five years ago because so few people took advantage of it anymore.

That mentality has changed amid a sluggish economy. A Wal-Mart executive said customers had requested the return of layaway as a way to help them manage their budgets during the frenzied Christmas season.

Under the terms of the new program, which begins Oct. 17, layaway items will be limited to toys and electronics, two of the most popular gift categories. Each item must cost at least $15, and a customer’s purchase total must be at least $50. Shoppers are required to make a 10 percent down payment and pay a $5 service fee; a $10 cancellation fee applies if the order isn’t paid in full and picked up by Dec. 16.

Popular during the Great Depression, layaway programs had all but faded away by the turn of the century as shoppers increasingly turned to credit cards to buy now and pay later.

But layaway has made a comeback since the most recent recession. The service enables shoppers to select their items early and pay off those purchases in a series of small payments; retailers hold the items during that time.

Walmart announced the news to its nearly 9 million Facebook fans, many whom have expressed their desire for Walmart’s layaway service. The company's announcement follows similar moves by rival chains in recent years.

Sears brought back layaway in 2008 after scrapping the service two decades earlier; and Toys R Us Inc. in 2009 introduced a layaway program. During the holidays last year, Kmart, one of the few retailers to consistently offer layaway, expanded its program.