November 16, 2009
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News: 38 Days Till Christmas; Beat The CC Crunch
Count them; 38 days till Christmas. Wow! It seems like it was just last month when we packed away those holiday decorations; barely enough time to gather dust. And what about those credit card bills. Are you still paying for gifts you purchased a year ago? If so, you're not alone. Although statistics show that Americans have reduced credit card spending over the past year, many continue to struggle meeting their daily needs let alone have the ability to pay down credit card balances. Retailers realize if business is going to be successful this holiday season, they have to expand shopper's paying options. In response, some retailers have re-invented the layaway program.
Consumers love the layaway plan because it allows them to shop early to assure getting that special gift before supply runs out. With the layaway program, for a small deposit and agreement to deposit a small amount toward the purchase price weekly or monthly, retailers will hold the item in storage. Shoppers are able to take the item home once they have paid the balance in full. Shoppers love going home with their special purchase while not increasing their credit card balance. For consumers, these plans have great benefits in helping to reduce credit card spending and very few risks. However, retailers incur the greatest risk. First, the product is pulled off the sales floor. If the shopper decides not to finalize the purchase, the item is returned to store inventory. In some cases, this could mean lost profits for retailers as the item could have already been reduced. The retailer also incurs additional labor costs for account management. After all, someone has to attend to the customer. There's also a need for additional storage space which can often pose serious problems for retailers.
To reduce the costs of risks, retailers will charge a small restocking fee if the shopper decides he doesn't want the product. Nevertheless, the layaway plan is a great alternative for shoppers and is a win-win solution for both shoppers and retailers. A few retailers offering the layaway program include Kmart, Burlington Coat Factory, and Toys R Us. If you are looking for alternatives to credit card spending this holiday season, ask your favorite retailer if they offer the layaway option.