NEW YORK – Walmart is bringing back something its customers have been asking for since the Great Recession: layaway.
The world’s largest retailer, which ditched the pay-as-you-go plans in 2006, is rolling out a holiday layaway option from Oct. 17 through Dec. 16. Walmart is following rivals that brought back the service during the thick of the recession.
The move comes as Walmart’s mostly low-income shoppers are increasingly being squeezed by high unemployment and rising costs. It also comes as Walmart Stores Inc., based in Bentonville, Ark., aims to reverse nine straight quarters of declines at its namesake U.S. stores open at least a year – a key measure of retailer’s health.
“We’re always looking for ways to ease budget strain for our customers, and we know this holiday season brings with it additional financial pressure,” said Duncan MacNaughton, chief merchandising officer at Walmart’s U.S. division. “This was a key component that our customers asked us for.”
Layaway – an agreement that allows shoppers to pay over time, interest-free, and pick up their merchandise when it’s paid in full – became popular during the Great Depression. The practice had become largely a thing of the past. But when credit dried up, and the job market turned sour during the recession that began in late 2007, Sears and other merchants added back or expanded the service.
Walmart said it will be able to limit costs now by limiting the layaway program to toys and electronics with a price tag of $15 or more. It also added a $5 non-refundable service fee and $10 cancellation charge for any orders not picked up by Dec. 16 or cancelled by the customer.
The program, which has a minimum layaway purchase of $50, is only available at stores and doesn’t include online purchases. It also requires a 10 percent down payment. The company said if the program is successful, it may extend the layaway throughout the year.