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Wal-Mart Stores to Cease Layaway Service
Wal-Mart Stores to end layaway service this year due to falling demand, rising costs

Sep. 14, 2006
By MARCUS KABEL AP Business Writer
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(AP) Wal-Mart Stores Inc. will end layaway service this year due to falling demand and rising costs, scrapping a tradition started when Sam Walton founded the chain in 1962 catering to cash-strapped rural shoppers in northwest Arkansas.

Wal-Mart said Thursday it will stop accepting layaway items Nov. 19 with a pickup deadline of mid-December. In its layaway program, customers make a down payment to hold an item and then generally had up to 60 days to pay it off, with a shorter deadline in the peak Christmas season.

Layaway services are used mainly by people at the lowest end of the income scale, who don't have credit cards and may not qualify for credit, analysts say.

The move comes as Wal-Mart is changing on many fronts, from adding upscale fashions to targeting new urban customers, in a bid to revive growth rates that have fallen behind smaller rivals such as Target Corp.

"Demand for layaway service has declined steadily as consumers turn to current options including online shopping, shopping cards and no-cost credit alternatives that were not available when the company was started," said Pat Curran, executive vice president of Wal-Mart store operations.

Analysts said most retailers have already dropped layaway service as it is expensive and cumbersome. Merchandise can be tied up for months and employees have to keep track of a steady trickle of payments.

One holdout is Kmart, a wholly owned subsidiary of Sears Holdings Corporation, which issued a statement Thursday stating that it continues to offer layaway services at its 1,300 stores.

"This is another recognition that Wal-Mart is no longer a little Ozarks company but instead is the nation's largest private employer and the world's largest retailer," said Patricia Edwards, portfolio manager and retail analyst at Wentworth, Hauser & Violich in Seattle, which manages $8.2 billion in assets and holds 51,000 Wal-Mart shares.

Still, Wal-Mart's union-backed critics said the move marked another step away from its founder's vision.

"Sam Walton's Wal-Mart _ the one that 'bought American', treated workers with some dignity, and gave low income customers a chance to buy an expensive item over time _ that Wal-Mart is now on permanent layaway," said Chris Kofinis, spokesman for WakeUpWalMart.com.

It is Wal-Mart's latest break with tradition this year.

Wal-Mart introduced pay caps for hourly workers last month after four decades of no limits on annual merit raises. It stopped selling guns in about a third of stores to make room for more non-hunting sporting gear. It is also tailoring stores to local demographics rather than stocking all Wal-Marts alike.

Wal-Mart said it is working on ways to make other payment methods available to shoppers with limited credit, such as Wal-Mart-specific cards that offer zero interest for the first 6 to 12 months.

Edwards said dropping layaway will not chase off Wal-Mart's lowest income shoppers because those customers still need low prices. Getting some of those shoppers to take in-house credit cards can also mean more money for the chain in the form of card fees.

Wal-Mart's shoppers have an average household income of around $30,000 to $35,000 a year, compared to $50,000 to $60,000 for customers at smaller rival Target Corp., Edwards said.

Wal-Mart spokeswoman Linda Blakley said that, as demand for layaway has dropped, the costs have gone up since the department has fewer customers.

Blakley said she did not have a precise estimate for the number of Wal-Mart's more than 1.3 million U.S. employees who will be affected.

But she said a typical layaway department has three employees. Multiplied by Wal-Mart's 3,256 U.S. discount stores and Supercenters, that would mean around 10,000 could be impacted somehow. Wal-Mart said layaway employees will be encouraged to seek new opportunities in their stores.

"We will do whatever we can to help them find those new positions," Blakley said.

Wal-Mart stores shares rose 29 cents to close at $48.37 Thursday on the New York Stock Exchange.



MMVI The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.


tHIS JUST SUCKS FOR MOST PEOPLE.
 

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I find that hard to believe....have you seen those lines around Christmas time? That is gonna hurt some folks.

I can understand it from Walmarts perspective. That has to suck keeping track of all that mess.
 

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LMBO................. my lord, I can not believe they would be that stupid. :eek:



Question is now, how many months before they start crying that their sales are way down :rolleyes:
 

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i have never used a lay-a-way but i know folks who wont buy without it..as was said this sucks...:darkbeer:
 

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I've never understood layaway. Why not just save the money and then go buy it. Is that so hard to do rather than buying an item, than paying for it over 60 days, what's the difference? It's how I buy cars. Rather than making car payments, I pay a monthly amount to myself, save it, and when there's enough I go buy a car, assuming I need one.....................ck
 

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The bowshop that I deal with offers layaway, but if you don't get your merchandise out in 90 days, you lose all the money you paid toward it! They make that clear from the start.
 

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clayking said:
I've never understood layaway. Why not just save the money and then go buy it. Is that so hard to do rather than buying an item, than paying for it over 60 days, what's the difference? It's how I buy cars. Rather than making car payments, I pay a monthly amount to myself, save it, and when there's enough I go buy a car, assuming I need one.....................ck

This is what I was thinking, how about some self discipline and financial sanity!! If you have to put in on layaway at Wal-Mart then chances are you cannot afford it anyway.....'94
 

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EASTON94 said:
This is what I was thinking, how about some self discipline and financial sanity!! If you have to put in on layaway at Wal-Mart then chances are you cannot afford it anyway.....'94
was that not the idea? cant buy it in one month you might in 3 months.:darkbeer:
 

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believe me....the associates aren't happy about this either....we have a lot of low income associates who depend on lay-a-way for their kids christmas.....everyone sez this will drive away customers to k-mart because not all people can get a credit card.....many of the associates can't get a credit card......it's a bad move as far as we are concerned.....
 

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EASTON94 said:
This is what I was thinking, how about some self discipline and financial sanity!! If you have to put in on layaway at Wal-Mart then chances are you cannot afford it anyway.....'94
Wow now that just made me feel like a total loser :embara:
 

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Obsession said:
Wow now that just made me feel like a total loser :embara:
Sorry, I just feel like the credit industry is running this country into the ground, you can finance cars for 7 years interest only home loans, payday loans, credit cards to your 18 year old college student......then wammo congratulations you are $10K, $20K, even $100K in the hole on your credit cards @ 21% interest and you have a household income of $40K a year, these things should be illegal!!

IMHO, if you want to save $300 for the PS3 or whatever and then buy it for your kids, have at it and layaway really is the same thing but man folks really need to get their priorities straight.

Don't get me wrong, I am in the hole myself but am doing much better nowadays at trying to curb spending. My kids wont be getting a PS3 or Gamecube but they have everything they need....Layaway at Wally world is probably really not my target but its really the same thing as credit other than you have to wait until youve paid it off to get the goods. '94
 

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Well Layaway worked for me and I will tell you why...

It's not always about self discipline with money, it's more about planning ahead and knowing you can get what your planning on. Theonly time I have really ever used Layaway is at Christmas time. I have 3 kids and have used it since they were born. I have them make out their lists and if it's something available at Walmart, it went on a layaway plan. That way I knew I had some of the things they wanted guaranteed for them but wasnt able to afford it at the time. Sure I could have went and saved money week to week and then what...go shopping with the day before Christmas when everything was gone? :confused: I was able to buy dvd players, tv's and video games due to layaway!! I didnt have 2 or 3 hundred at the time to spare and felt by saving it up from week to week still wasnt going to guarantee the store would have what I wanted and it was much easier to go put down 20-30 bucks a week and knowing they were all set for Christmas!

I don't know how anyone would be against layaway. I am not a credit card holder...I hate credit cards and learned the ard way years ago. ANything I buy is cash!! If I don't have cash, I don't get it. So does that mean if I go to a store and see something I really wanted or needed and even find out it might be on sale or it may be the last one left, does that mean I am not entitled to it because I can't afford it at the time? :sad: I don't get to have it because I don't want to carry a credit card ?? If they have Layaway, thats where I am headed!

So, I don't think so...

I also remember once when my kids were really little and were in desperate need of snowsuits as the winter months were coming and I went to Walmart and saw they were anywhere from $40-60 because they just came out. I knew at the time and that day that I couldnt get them, I only had a little bit of money on me. I thought to myself, I wil just get them when I could afford them but noticed they only had one left in the size one of my daughters was at the time. I was pregnant with my third child and wasnt suppose to be working due to a pregnancy complications but there was no way I couldnt afford to work so I still did daycare at home but I took it easy as best I could and only watched kids who didnt have to be carried. I only made around $80 a week back then and it didnt go far. I threw those snowsuits in Layaway that day I saw them and cried all the way home because I felt like such a loser not being able to buy my kids a coat on the spot. But when I had them paid off and got them before the snow fell...I felt really good! I didnt have someones hand me downs, I didnt miss the few bucks a week to pay them off and I didnt need welfare or ask from a handout from anyone, I earned the money, I bought them and Layaway helped me do that! :)

Meijer Layaway is where I'll be for Christmas this year, I have ipods, cell phones, dvd's and cd's to buy!!
 

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Ok so I guess maybe I don't understand the layaway concept, do they not charge you to put it on layaway??? I figured they charged some sort of percentage to do that, I am sorry if I misunderstood the concept...'94
 

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I can get a credit card...

but why should I? My wife has a credit card and we are trying to pay it off. Why would I want to go into more debt with more credit simply to buy gifts for the family? Layaway makes much more sense... We make between us well over what the "average medium" shoppers make who shop at target, but the layaway was something that we could do to get my large family presents. Oh well...looks like I'll be going to K-mart. If I don't find what I need maybe I'll order it on line and have it sent to k-mart...if thats something I can do.

Paul
 

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EASTON94 said:
Ok so I guess maybe I don't understand the layaway concept, do they not charge you to put it on layaway??? I figured they charged some sort of percentage to do that, I am sorry if I misunderstood the concept...'94
I believe you do, and you must pay it off in a certain number of days... basically its like "we'll set this aside with a deposit and you have to finish paying it off in a few months"

I've never used Law-a-way either, and don't really see a need for it. If you plan on buying something why wouldn't you save up in advance before walking in the store? Its directly inline with the rest of the US's motto - ITs always somone elses issue

So as long as I give you 10.00 a week you have to hold it for me until I can pay you all the money.

In the meantime the store has to eat the cost of storing the item, paying the item off, and managing the finacnese for the item until you get around to paying it off. as opposed to somone just buying it right out and allowing them to replace it and get another one on the shelf.
 

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Think about this:

Mom and Dad go to Walmart to do their Christmas shopping. They get a buggy full of toys, clothes, etc., including some of the hottest selling toys. They put them on lay-a-way. Wal-Mart puts them in boxes and stores them in the portable trailers you see behind the store. Mom comes in a few times and makes the payments. Eventually they run into money trouble and come in for a full refund. Meanwhile the store has lost potential sales of the toys and had to pay for the storage trailers.

I worked at Wal-mart for a long time. This happens a lot. If you had ever watched the lay-a-way dept during this time of year you see families putting stuff on lay-a-way that they couldn't afford. Also, try calling your bank and asking for a $1,000 loan interest free or call your local Chevy dealer and ask that they take a new truck off the lot and put it away for you until you can pay off the down payment. Its the same principal as lay-a-way.

I must say that the lay-a-way dept is a great place to hide the Christmas presents from your kids:wink:
 

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and all those people that work in there will get wacked i doubt many of them will get "rolled into other positions" at least not with out taking a pay cut..

God help those people get a union in wal mart, they are getting SCREWED, mark my works 10-20 years from now unions will be HUGE again.. just as tehy arte in europe right now
 
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