Corine O’Neill wanted to get her Christmas shopping done, but she was wary of drowning herself in the false security of a credit card.

“Being on a low budget, I wasn’t wanting to have a crazy ton of credit cards,” she said.

So when she discovered Kmart was offering layaway services, she decided to get her shopping done and pay gradually in the months before Christmas. She filled up two layaway boxes, worth about $100 each, paid a nominal down payment and scheduled a plan to pay every two weeks until the boxes are paid off — at which time she can take the items home. She’s even scheduled her payments alongside her paycheck, so when she gets paid, she knows to make a payment on her layaway items.

“This way, it doesn’t affect your credit score at all, but you’re able to stretch out your payments,” she said.

O’Neill is representative of many shoppers in 2012 who have been burned by bad credit or fearful of going into debt. Many stores have responded by creating or reinstating layaway programs that fell out of fashion years ago. Walmart, which discontinued layaway in 2006, brought it back last year after high customer demand, said spokeswoman Latoya Evans. In October, she said Walmart had lined up $400 million in U.S. layaway sales for the holiday season.

Walmart, Kmart and Sears have streamlined layaway programs this year to entice shoppers to participate. Kmart, for example, allows shoppers to create a layaway “basket” online, which can then be shipped to a home address.

“In our area, there’s high unemployment and high underemployment,” said Richard Feinberg, a Purdue University professor of consumer sciences and retailing. “What can stores do to help them buy more?”

Feinberg said layaway programs were very in common in the ’50s and ’60s, a time when credit cards weren’t used.

“When credit cards became more common, [layaway] went away,” he said. “And now we’re back again when people have maxed out their credit cards or don’t have credit cards.”

In the past, Feinberg said, layaway users were crippled by fees and hidden costs. But now, he said, many big-box stores have eliminated or lessened their severity. He says layaway, for a particular set of consumers, is a responsible choice — but warns consumers to keep up their payments.

“It’s extremely responsible, because you can’t get the merchandise unless you’ve paid for it,” he said. “You can’t go into debt that way.”

Each layaway program is different — some are offered only during the holiday seasons and some year-round.

Some restrict the types of items available for layaway, and down payments also differ. Feinberg advises reading the “fine print” before enrolling in any program.

Using layaway also rids shoppers of the worry of their desired merchandise going out of stock or being hard to find later in the holiday shopping season.

Kylie Taylor, who is participating in Walmart’s layaway program, bought toys for her son using layaway to make sure they wouldn’t be gone later.

“It was just better because I could get them out all at once,” she said. “I didn’t want to have to worry about Black Friday and running out.”  

Evans said having the items put away and protected gives customers a sense of security.

“Your merchandise is in the store,” she said. “You’ve touched it, you’ve seen it, you’ve put it there yourself.”

Megan Graham is the Kokomo Tribune business reporter. She can be reached by phone at 765-454-8570, email at megan.graham@kokomotribune.com.