NEW YORK — Wal-Mart is bringing back something its customers have been asking for since the Great Recession: layaway.
The world’s largest retailer, which ditched the pay-as-you-go plans in 2006, is rolling out a holiday layawayplan from Oct. 17 through Dec. 16. Wal-Mart is following rivals that brought back the service during the thick of the recession.
Wal-Mart’s layaway option comes at a time when its mostly low-income shoppers are being squeezed by high unemployment and rising costs. It also comes as Wal-Mart tries to reverse nine straight quarters of revenue declines at its namesake U.S. stores open at least a year — a key measure of a retailer’s health.
“We’re always looking for ways to ease budget strain for our customers, and we know this holiday season brings with it additional financial pressure,” said Duncan MacNaughton, chief merchandising officer at Wal-Mart’s U.S. division. “This was a key component that our customers asked us for.”
Layaway — which allows shoppers to pay over time, interest- free, and pick up their merchandise when it’s paid in full — became popular during the Great Depression. The practice had become largely a thing of the past as the economy flourished and consumers were feeling more confident. But when credit dried up, and the job market soured during the recession that began in late 2007, Sears and other merchants added back or expanded the service.
Citing increased costs and lower customer demand, Wal-Mart phased out its layaway in September 2006 __ roughly a year before the recession began __ with the exception of fine jewelry. But the discounter faced criticism because it built its reputation on helping its low-income shoppers.
Wal-Mart Stores Inc., based in Bentonville, Ark., said it will be able to limit costs now by limiting the layawayprogram to toys and electronics with a price tag of $15 or more. It also added a $5 non-refundable service fee and $10 cancellation charge for any orders not picked up by Dec. 16 or cancelled by the customer.
The program, which has a minimum layaway purchase of $50, is only available at stores. It also requires a 10 percent down payment. The company said if the program is successful, it may extend it throughout the year.
The layaway plan is part of Wal-Mart’s efforts to turnaround its struggling U.S. business. In addition to thelayaway program, Wal-Mart said that starting Monday, it will launch price cuts on dozens of holiday toys to $15. The company also said that it will start offering small samples of holiday merchandise, including outdoor décor, later this month __ two weeks earlier than a year ago.
These moves are just the latest effort by Wal-Mart to revive sales. Wal-Mart has been going back to “everyday low prices” instead of focusing on pricing gimmicks like temporarily slashing prices on select items that caused some shoppers to go elsewhere. It’s also finishing up restocking thousands of items it cut during an overzealous bid to clean up its stores.