Lay-away…the new, very old, credit

When I was a kid, it was considered a very bad practice to incur any kind of credit.  If you couldn’t pay, you couldn’t buy.  Even when I was in university, there were no credit card companies vying for our business…if you didn’t have the money, you were out of luck.  We scoured second hand bookshops for our textbooks, and spent hours in the libraries in order to wait for the return of some pivotal text, rather than spend a cent on photocopying or (gads) going out and buying the text first hand. 

What we did have was layaway.  My grandparents bought their sofa’s on layaway, paying off $5/month until the furniture was fully paid and could be released to them.  I bought my prom dress on layaway, as did my best friend.  There was a certain magic in going together to make the next installment of a payment.  The saleswoman would take your money, give you a new receipt showing how much you had paid and how much you still owed, and would ask if you wanted to see (or try on…gasp!) your dress. 

My first real job was as selling women’s clothing, retail.  Most people paid by check or cash (and we’d have a huge bank run at the close of each business day…always scary with so much cash) and a big factor in being able to sell way by pushing the layaway option.  I can’t tell you how many summer dresses I would sell on layaway in April for women to pay off and pick up in time for sunny Montreal Julys.

With such freely given credit over the past 20 years, layaway got laid away.  Until now.  With a sad economic outlook for the holiday season, Kmart is giving layaway a makeover. TV ads are running promoting the virtues and advantages of layaway.  They are changing their model because they have to.   I think I recall they started layaway last year.  Well, this year, with the money still not flowing, they’ve taken it a step further with online layaway 

 My parents always taught me to only use a credit card if I could pay off the full balance each month, and I’ve lived by that.  At one point in my early 30’s, I even decided to go credit card free for a year and see if I could.  I did.  And I saved money…a lot of it…just by having to take a moment to pause before deciding to buy something. 

I like this resurgence of the lay-away model.  Maybe it will help people get back on the right financial track for their families. 

One more flashback…the golden moment of paying off my prom dress in full and getting to pick it up.  Magic.

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