Consumer expert Clark Howard’s column appears here each Thursday in conjunction with Deal Spotter, a weekly print section in The Atlanta Journal-Constitution.
Walmart is reintroducing layaway to help shoppers play Santa Claus on a cash budget this holiday season.
The nation’s largest retailer is the latest to breathe new life into this very old way of shopping. Sears, Kmart and Toys “R” Us have all done layaway plans for the past few years and are doing them again this season.
Here’s how layaway worked in the past: You’d go into a store during the fall and put a deposit down on a sale item that you wanted to give someone at Christmas. (Traditionally, your deposit was noted on a piece of carbon paper in the days before the computer era.) Then you would pay additional money toward the outstanding balance in the weeks leading up to Christmas.
Usually by the second week of December, you’d be required to have finished paying off the balance in full. If you didn’t pay it off in full by that time, you didn’t get the item and — depending on the retailer’s policy — you could lose all the money you’d been paying through the fall.
Layaway slowly went away because people increasingly just decided to charge their purchases on credit, whether they had the money or not.
But I love the idea of layaway making a comeback because it forces you do to a cash Christmas.
Walmart’s layaway plan will only be available for electronics and toys. You’ll be required to pay off your balance by Dec. 16. If you can’t come up with all the money by that date, Walmart will give you everything you paid back, minus a $10 service fee. That seems fair to me.
Remember, cash is king. Layaway can help you avoid a debt hangover come January that has you wheezing under the burden of bills throughout 2012.
Only spending what you have — wow, what a concept!
-by Clark Howard, Save More, Spend Less, Avoid Rip-offs
Find more answers to your consumer questions, plus Clark’s new book “Living Large in Lean Times,” at ClarkHoward.com. Listen to his radio show live 1-4 p.m. Monday through Friday on WSB 750 AM and 95.5 FM.