The Somewhat Surprising Return of Layaway, Complete With Mobile Payments

Way back in the 1930s, when the Great Depression stalked the land and turned even the US into a gutted-out shell of an economy that took a worldwide war to shrug off, trying to get shoppers to actually shop was a nerve-wracking event. Many stores simply couldn’t handle the concept and ended up going under. However, the concept of layaway put some new life in store receipts, and now, thanks in part to mobile payments, layaway is making a real comeback even in 2018.

Layaway started to fade out back in roughly the 1980s, after credit cards effectively short-circuited the layaway process by offering exactly what the stores offered. Better yet, credit cards allowed people to actually have the item while making payments, a point layaway couldn’t match. Yet when the economic crisis of 2008 came around, and customers started viewing their credit cards less as valuable financial tools and more like a potential rocket-sled to poverty, layaway’s simple precepts of “pay a small fee, make regular payments, get your item” took on a whole new value.

Now, fully one in three shoppers are planning to put layaway to use, said a NerdWallet survey. Naturally, that’s not nearly at the credit card level of 78 percent, but it’s clear that layaway’s making a comeback. We’ve even seen some services look to approximate layaway, like Afterpay and Splitit.

It turns out that it’s not really a matter of income that drives layaway users. Sure, many are lower-income folks looking for a way to afford more Christmas giving on a budget that’s not quite suited to it, but plenty of middle-class folks turn to it as well. It’s all really a matter of how forward-looking the customer is. Plus, the fact that the store holds the purchases until the payment cycle is complete is welcome for many, especially those with young children eager to get an advance look at what exactly St. Nick will be bringing by.

I can only imagine the impact that layaway might have if stores offered gift wrapping either free or for a slight extra charge as part of the layaway protocol. It might well get people in who wouldn’t ordinarily use the service, and really make it clear that layaway’s back to stay.