Layaway returns as a way to afford the holidays

Toys "R" Us and Babies "R" Us are giving Santa (and cash-strapped parents) an early gift this holiday season: Layaway.

Monday the toy store chain announced the introduction of in-store layaways as a means to help customers spread out payments on some holiday purchases.

But, don't rush out to stash Barbie on a back room shelf just yet. Not all items in the stores qualify . "Big gifts" like cribs, car seats, bikes, TVs, dollhouses, karaoke machines and wagons -- those not often stocked -- are a sampling of the things that are eligible. Shoppers wanting to get a jump on summertime can also layaway kiddie pools and water slides to give as holiday gifts.

To place an item on layaway, you've got to pony up a deposit equal to 20% of the total purchase (including all taxes) plus a $10 service charge. Payments can be made in-store or by phoning the store you opened the layaway at. You can use cash, check, credit or debit or gift cards for payments and a fee (that varies by state) will be applied to any layaway orders that are canceled.

You've got to have everything paid in full by Dec. 6. Jenn Albano, director of corporate communications, said that'll guarantee merchandise will make it under the tree in time.

"Items will be available within seven to 10 days of the final payment and customers can pick up items in the store, or arrange for at-home delivery for an additional charge," Albano said.

The layaway program is not available in Maryland while residents in Ohio and Rhode Island are subject to a different cancellation policy than in other states.

Not wanting to miss out on your holiday shopping dollars, Kmart and its parent company, Sears, are also offering a holiday layaway program.

In addiiton to toys, shoppers can tuck sleepwear, dartboards picture frames, shoes, and a host of other household goodies. As an added bonus, you can point and click your way to a Kmart or Sears layaway. Just look for the layaway icon on products on their sites for additional information and to open an account.

"Payments can be made in person or online, and you can arrange to pick items up in person, or pay for delivery," said
Susan Ehrlich, president, Financial Services, Sears Holdings.

Shoppers can leave items on layway for up to eight weeks and are required to put down a 10% to 15% deposit, plus a $5 new account fee. Payments are expected b-weekly, although you can pay off the balance sooner. The cancellation fee is $10.

If toys, tools or towels aren't your cup of tea, SmartyPig, the high-tech piggy bank, offers consumers the option to open goal based savings accounts to stash holiday gift cash. These accounts come with a 2.01% APY.

Tiffany Spencer, spokeswoman for SmartyPig, said, "users create specific savings goals, determine a savings schedule, automate regular contributions from their existing checking or savings account, and track their progress while earning one of the most competitive interest rates in the country."

When a goal is reached, you can transfer the money saved -- plus interest -- back to your checking or savings account to spend wherever you want. But, you can also receive it on a SmartyPig MasterCard debit card (which can be used anywhere MasterCard is accepted) or put it on a retail gift card from name brand partners such as Best Buy, Home Depot, Macy's Pottery Barn, and many others. If you chose a retail gift card, the merchant will tack on an additional award -- up to 6%.

"SmartyPig cards, and those of their retail partners, never expire and aren't charged fees inf not used by the end of the year," Spencer said.

And if you happen to be eyeing gifts for the 2010 or 2011 holiday seasons, Gettington offers an "easy" payment plan that lets you spead payments out on thousands of items for as long as 24 months.

Just like a credit card, you've got to apply and if approved, will be charged a variable APR of 19.90%. Payments must be $20 or 5.5% of the balance -- whichever is greater. They also tack on a late payment fee of $24.90, so even though this plan is easy, it sure isn't cheap.

Gina Roberts-Grey is a freelance journalist specializing in consumer issues.

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