Maryann Rengers walked out of a Kmart on McKnight Road having paid just $15.59 for Christmas gifts that cost more than $150.
She's not a bargain-hunting genius. Rather, like many Americans this year, Rengers, 48, of Hampton is taking advantage of Kmart's layaway purchasing program, allowing her to pay for goods in manageable installments before taking them home.
"I haven't bought on layaway for a long time, but this year, with the economy so bad, it gives me peace of mind," Rengers said last week at the North Hills Kmart. "I can make the payments in smaller amounts, not one big sum."
She has eight weeks to pay off her balance. She made her first payment on gifts for her three kids-- including dresses, toys and video games -- and will return every two weeks to make payments that amount to little more than $1 a day. Once the balance is paid off, she'll take the gifts home, wrap them and place them under the Christmas tree.
"This helps," she said. "It honestly and truly does."
Others apparently agree. Layaway gained popularity during the Great Depression, then gradually lost favor among the purchasing masses as a culture of credit cards and instant gratification set in. But that appears to be changing -- at least temporarily.
"In this country, there's been an attitude, a culture, of satisfaction now," said James Craft, a professor at the University of Pittsburgh's Joseph Katz Graduate School of Business. "But now, we're being forced to really look and say, 'Can I afford this?' The attitude of enjoy now and to heck with the future isn't as prevalent."
This newfound culture of frugality can hurt retailers, especially during the holiday season: The National Retail Federation is projecting sales to rise 2.2 percent this year, well below the 10-year average of 4.4 percent holiday sales growth and the slowest growth since 2002. Offering layaway plans is an attempt to lure consumers who are loathe to fall into debt and reluctant to spend during uncertain times.
"It's a rational response on the part of retailers to maintain a flow of sales, but at the same time adjust to meet the needs a customer might have," Craft said.
Kmart is one of the largest national retailers offering layaway plans. TJ Maxx, Marshalls and Burlington Coat Factory have layaway options. Wal-Mart discontinued the practice in 2006.
Demand for layaway plans has soared at local Kmart stores. Although corporate spokeswoman Kimberly Freely would not reveal national statistics, a store manager at a Kmart in North Versailles said layaway purchases are up 35 percent this year.
"We are getting killed with it," the store manager said. "It's been tremendous."
Layaway's resurgence has reached the Internet.
The Web site eLayaway.com went online in August 2006, and the site's senior vice president of business development said the business is growing exponentially.
"We had 10,000 registered members by January, and 75,000 to date -- including 10,000 new members in the last 10 days," eLayaway.com's Michael Bilello said. "We expect to have over 100,000 members by November."
Bilello said the most popular items purchased at the Web site include iPods, video games, golf clubs and jewelry.
Some of the more exotic virtual layaway purchases include hip replacement and hair transplantation surgeries, he said.
Layaway plans are not free. At Kmart, customers must make a down payment, pay a small fee, and keep up their payments for eight weeks until the merchandise is paid off. If the customer defaults, they receive a refund, minus a penalty fee.
At eLayaway.com, the handling fee is 1.9 percent of the total, including taxes and shipping. The average price of merchandise bought at the Web site is $600, Bilello said.
He predicted that layaway purchases will continue to gain in popularity, especially online.
"People did not forget about layaway -- retailers abandoned it," he said. "But there's an entire population of consumers who were very comfortable with it. They still are."
Perhaps, but although consumers are "postponing gratification" for the time being, Craft predicts a return to old habits once the economy improves.
"We have an immediate gratification culture -- I want it now and I'll pay later," he said. "That's not possible right now -- but as soon as (consumers) get the chance again to buy whatever they want, they will."
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