Retailers are meeting the challenge of "credit contraction" and consumer conservatism by reviving the lost art of consumer layaway.

What is causing the recent revival in layaway programs? How do layaway programs work and operate? Who is offering layaway programs? Should I use retail layaway programs? What other valuable lessons and benefits are offered by layaway programs?

The holiday hangover. Consumer aversion to the dreaded "holiday hangover" of large post-Christmas season credit card bills is one explanation offered by retail industry watchers for the explosive growth and revival of retail store layaway programs. For an anthology of collected media stories about the growth in layaway programs, visit www.layaway.com/company/media_relations.com.

Economic uncertainty. Another reason given is the uncertainty of employment and income perceived by many consumers. Shortly put, it is usually relatively painless to step out of a retail layaway commitment at the last minute….and purchase something more modest priced than the item originally placed on layaway.

Benefits of delayed purchase. Worried about the possibility of receiving a December layoff notice? Better to have that bigger ticket gift on layaway until the last possible minute – retreiving and paying for the item on December 23rd. If the layoff notice comes on December 22nd, then you can simply decline to complete the transaction….with little or no penalty.

Credit contraction. Were your credit card maximum allowable balances (credit limits) reduced so you no longer have "room" on your credit card balance to fit in the purchase? No problem…just place the item on layaway.

(Note: I do not recommend carrying a balance month to month on a credit card. I recommend timely payment of the full balance each and every month so as to avoid finance charges).

To my present knowledge, Sears, Walmart, Best Buy, Toys-R-Us, Marshalls, Burlington Coat Factory, T.J Maxx and KMart all offer layaway. Kohls offers a 3 day hold, but no layaway as of my latest internet inquiry. JC Penny may offer layaway at some locations. I don’t think Macy’s has a widespread layaway program, and I can’t find any indication that Nordstroms has a layaway program. (FYI, most of this information came from an online article, dated Sept. 28, 2011, at www.Bizmology.com.)

Interestingly, Walmart had scrapped its layaway program in 2006, yet revived it just a few years later, as reported October 13, 2011 in the NY Times, page B7 "Wal-Mart Sales Improve at its US Stores" by Andrew Martin.

So to answer the balance of questions about layaway:

Yes, I would recommend investigating layaway programs, but of course read the ayaway agreement fine print ahead of time to ensure there are no costs, fees or payment forfeitures for failing to complete the transaction.

No, I would not recommend layaway if the sole reason for doing so is to because you are already maxed out on other credit cards. Use layaway as a tool to minimize or avoid finance charges and do not use it as a desperate substitute for lack of available credit limit when other cards and accounts are maxed out.

Yes, I would teach your children about layaway. Financial literacy is a valuable lesson…almost as beneficial as the lesson in delayed gratification and financial discipline encouraged by the "save for it" nature of the venerable layaway program.

Happy shopping…and even if it is a bit early….Happy Holidays!

Many experts believe that we may be headed for another recession. Don’t enter a second recession with piles of debts. I can counsel you on your debts. I am sure that I can be of assistance to you, a family member or a friend as we all know someone experiencing trouble these days even if we are not experiencing our own financial troubles. Please do not hesitate to make contact with me. I emphasize courteous and discrete consultations packed with plenty of information. The life impact of meeting with me in person will be unforgettable. You will enjoy a new peace of mind and a fresh hope for the future with a new roadmap for financial success that we develop together. You can email my scheduler through our website for your free 30 minute consultation at www.washingtonbankruptcy.com or e-mail directly at [email protected]. To schedule immediately, we can be reached at 253-383-1001 M-Th 9am-5:45pm and Friday 9am – 12pm.