Black Friday — the day after Thanksgiving that is considered the largest shopping day of the holiday season — doesn’t mean much to Mary Martin.

Yes, Martin shops for Christmas gifts, but her gift-shopping season starts in October when she begins buying gifts for birthdays and anniversaries coming up during the fall and winter.

With so many gifts to purchase during a tight, economic time, Martin uses layaway to “buy what I want to buy instead of settling for what I can afford.”

Recently, Martin completed paying for bunk beds she placed in layaway at The Best Deal Home Furniture, 2902 S. Washington St.

Layaway — a pay-as-you-go way to shop — has been around since the Great Depression. Layaway allows customers to make installment payments on items until they are paid in full.

Ellen Davis, vice president of the National Retail Foundation, told U.S. News and World Report that, as the economy and the credit market tighten, retailers are again exploring layaways.

Furthermore, she added, for customers without checking accounts or credit cards, layaway offers them an opportunity to pay over time for an item they want.

“Retailers are using layaway programs to their advantage during this holiday season, because they know people are on a budget and they don’t want to overspend,” said Davis.

Most layaway programs work by having a customer pay a fee for a store to hold an item. The customer leaves a deposit of 5 percent to 20 percent of the purchase price and then makes regular weekly, biweekly or monthly payments until the item is paid in full.

If the item isn’t paid off in time, or the customer cancels the transaction, the item is returned to stock and, depending on the store’s policy, the customer can lose some money they applied to the item’s cost.

However, during the 1980s, with more credit cards and purchasing options available, most stores eliminated layaway programs.

Wal-Mart, the nation’s largest retailer, eliminated most of its layaways in 2006. The retailers’ spokeswoman, Ashley Hardie, said the practice was too costly and caused the retailer to raise prices. However, layaways for fine jewelry are still allowed.

With the holiday shopping season approaching, analysts forecast 2009 holiday retails sales to total $437 billion — a decline of 1 percent from 2008. And in a tight credit market, some stores have re-implemented layaways.

Laura C. McDowell, manager of media relations for T.J. Maxx and Marshall’s, said “we are always assessing and reviewing ways to improve and enhance the quality of both customer service and our customers’ in-store shopping experience.”

Some T.J. Maxx and Marshall’s locations do offer a 30-day layaway program to customers, she said.

In addition, layaways aren’t just for brick-and-mortar stores. Layaways have reached online companies as well, including HSN.com, LayAwayTravel.com and lay-away.com.

In the virtual mall of eLayaway.com, which has more than 1,200 merchants, customers pay a 1.9 percent transaction charge. They can make payments for as short as three months or up to a year.

eLayaway began in 2006, and Michael Bilello, senior vice president of business development for the Florida-based technology company, said 75,000 customers have used the Web site to buy and pay for everything from technical equipment to medical procedures.

According to its Web site, eLayways’ transactions are up more than 90 percent over last year’s figures.

The ability of an online retailer to store merchandise at a warehouse offers them an advantage over most traditional stores.

“A lot of stores eliminated the [layaway] practice due to physical space. It just wasn’t feasible,” said Theresa D. Williams, director of the Center for Education and Research in Retailing at Indiana University’s Kelley School of Business.

Before becoming the center’s director, Williams worked as a retailer buyer for three Southern-based department stores. Her center also made the 2009 holiday retail sales forecast.

“For most stores, layaway isn’t a good use of space. They are not getting a good return on their investment and that’s not profitable. With Wal-Mart, 20 percent of their customers don’t have a checking account, and layaway wasn’t seen as profitable for the company. Layaways tie up space. A lot of stores would love to have it, but for most, it isn’t possible because of space issues.”

Regardless of space concerns, Kmart has offered customers layaways for more than 40 years.

The Michigan-based retailer is currently using its Christmas marketing campaign to inform shoppers they are layaway-friendly.

Its campaign is reminding customers that, in addition to being easier on the wallet, layaway offers a convenient hiding space for gifts.

“Layaway is extremely popular,” said Katherine Jones, assistant store manager of the Kokomo Kmart. “Sometimes, we have lines all day. Except for some items, the minimum we require is $15 and that keeps it there for eight weeks. If you have three kids, you can’t buy everything at once and that’s where a lot of people use our layaway.

“It’s a way to stretch your dollar, and once it’s purchased, we can hold it for here for them.”

Kmart is part of Sears Holding Corp. Last year, Sears ventured into layaway and it has been “a convenience for our shoppers,” according to Danella Brown, assistant store manager at the Markland Mall Sears.

“It has been a good program for us,” said Brown. “We relaunched it last year, and now we offer it year-round. What we have found is while people pay over time, they may put a $50 item in layaway, but over the course of paying it off, they may spend $100 here. Most people are using [layaway] for big-ticket items. They aren’t just using it for holiday shopping either. Some people put snow blowers in layaway. They know they’ll need it, but they can’t afford it right now. Layaway is good for that.”

While layaway is a good way for customers to buy what they want over time, Yuvonne Cross wishes more customers were taking advantage of her store’s layaway plan.

Cross has owned Cross Interiors for 12 years. Her 417 N. Washington St. furniture store has offered layaway the entire time, but Cross said right now her layaway service “isn’t that active.”

“You would think it would be, with the way the economy is and everyone is short on cash, but right now it isn’t,” said Cross. “Layaway is good when you want to get something you aren’t quite ready for, or something you know you’ll need in the near future. When you use layaway, you know you’re sure to have it when you are ready for it.

“I’ll work with my customers any way I can, but business is lousy everywhere, but I have [layaway] here for them to use.”

• K.O. Jackson is the Kokomo Tribune’s business writer. He can be reached at 765-854-6739 or via e-mail kirven.jackson@kokomotribune.com

Tips to layaway

Customers using layaway should be aware of the following:

• To avoid any misunderstandings, get specific information about a store’s layaway terms before participating in its layaway program.

• Ask how much time you have to pay for the item and what type of payment is required.

• Get the store’s refund policy in writing.

• Keep a record of all payments.

• Ask the seller to identify your merchandise in writing to ensure you will receive the exact item you are purchasing.

Source: Indiana Department of Financial Institutions Consumer Credit Division