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What stores will offer layaway this holiday shopping season? What's Walmart, Amazon doing?

As the time for gift giving rapidly approaches, holiday shoppers may look for alternatives to check the items off their list while stretching their dollar as prices soar thanks to inflation.

Layaways have long served as a way for consumers who can't purchase an item in full upfront to pay in installments. But many brick-and-mortar stores have done away with layaway plans because of logistical issues such as making sure the items that have been reserved are in stock when the costumer pays the remaining balance and storing the products, experts said.

Amazon, however, recently launched a layaway program, while other online retailers have opted for buy now, pay later programs.

"What I find interesting is that a lot of the online vendors are beginning to do layaway," said James Mohs, an associate professor in the Accounting, Taxation and Law department at the University of New Haven. "Are they trying to take over that market?"

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What is layaway?

A traditional layaway involves reserving an item with a down payment and paying the remaining balance over time, often interest-free. The product is held by the seller until the shopper pays the balance.

"Layaways are nothing new," Mohs said, noting the service goes back to the Great Depression. "They've been around for a long, long time."

What stores have layaway? Will Kmart, Target offer the service?

Amazon offers layaways, but the program may not be available depending on factors such as product availability and delivery address, according to its website. Consumers can reserve eligible items by paying 20% of the total cost.

Amazon may provide layaway as other retailers eliminate the service because of the retailer's storage capacity, thanks to its network of warehouses, said David Sacco, practitioner in residence at the University of New Haven's finance program.

"All they're really doing is they're taking your money in advance and then shipping the good when you pay for it in full, which is not a big hassle for them," Sacco said.

Here are some other stores that offer layaway plans:

  • Burlington: Layaway items are held for less than 30 days if placed between Nov. 19 and Dec. 11.

  • Kmart: Products can be purchased online and payments are made every two weeks.

  • Hallmark: Layaway items are held for up to 90 days.

Target said on its website that it doesn't offer layaway online or in store.

Catherine Chesnut fills orders at the Amazon fulfillment center on Cyber Monday, Dec. 1, 2014, in Lebanon, Tenn. Cyber Monday is traditionally the busiest online shopping day of the year.
Catherine Chesnut fills orders at the Amazon fulfillment center on Cyber Monday, Dec. 1, 2014, in Lebanon, Tenn. Cyber Monday is traditionally the busiest online shopping day of the year.

Will Walmart bring back layaway?

Walmart last year scrapped its layaway program and replaced it with a buy now, pay later financing option. The retailer won't offer layaway services this holiday season, Walmart said in an email.

Walmart offers the installment payment service Affirm to purchase toys, electronics and other items, as well as a Capital One Walmart Rewards card, which offers 5% cash back online and 2% cash back in stores.

Don't forget: Buy now, pay later is a form of debt

How is layaway different from buy now, pay later?

Traditional layaway plans have been replaced by buy now, pay later services such as Affirm, Sezzle and Zip.

While layaway items are kept by the seller until the shopper pays for them in full, buy now, pay later programs allow consumers to get the product right away as they pay in installments.

Some critics of buy now, pay later programs, however, have expressed concern over hidden fees. On its website, Affirm said it doesn't charge interest or fees.

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Is layaway a good idea?

Layaway programs allow consumers to lock in prices, an advantage as prices soar amid 40-year high inflation.

"People who were looking at higher holiday expenses for a variety of reasons get to budget those out over a longer time period," Sacco said.

But the ability to pay an item over time may entice some consumers to exceed their budgets when shopping for the holiday season, Sacco said.

Avoid overspending, experts advise.

"If you can't afford it," Mohs said, "don't buy it."

This article originally appeared on USA TODAY: What stores are doing layaway during the 2022 holiday shopping season?