Oregon Public Broadcasting

The financial crisis has forced many people to re-evaluate their relationship with credit. 

Shoppers are leery of taking on more debt as unemployment rises and investments shrink.  But the credit crunch has led to a revival of sorts of a classic financing method: the layaway. 

Ann Dornfeld of KUOW in Seattle reports in the latest installment of our series, Holiday Freeze.

SO YOU'RE WALKING DOWN THE STREET WHEN ALL OF A SUDDEN, THERE IT IS IN A STORE WINDOW.

THE BICYCLE OF YOUR DREAMS. IT'S SLEEK, AND RED, AND YOU WOULD LOOK SO GOOD ON IT. YOU RUSH IN TO SQUEEZE THE BRAKES, IMAGINE THE WIND ON YOUR FACE AS YOU COAST DOWN THE HILL... THEN YOU SEE THE PRICE TAG.

VOICES IN HEAD: "JUST CHARGE IT!/THIS IS A RECESSION./YOU DESERVE IT!/TOTALLY OUT OF THE QUESTION."

HERE'S AN ALTERNATIVE: LAYAWAY. A GROWING NUMBER OF STORES WILL HOLD THE ITEM FOR YOU FOR A SMALL FEE AND DOWN PAYMENT. THEN YOU MAKE REGULAR PAYMENTS ON IT, INTEREST-FREE. IF YOU CHANGE YOUR MIND OR CAN'T PAY IT OFF, YOU GET YOUR MONEY BACK, MINUS A SMALL RESTOCKING FEE.

LAYAWAY WAS INTRODUCED IN THE 19TH CENTURY TO BUY THINGS LIKE BOOKS AND PLOWS. AND BECAME POPULAR DURING THE GREAT DEPRESSION. IT CAME IN HANDY DURING THE THIFTY DAYS OF WARTIME, TOO, AS IN THIS 1944 AD FROM THE SEATTLE POST-INTELLIGENCER -

"CHRISTMAS IS SURELY THE PERFECT DAY FOR GIVING YOUR BEST BELOVED THE DIAMOND SHE HAS HER HEART SET ON. AND TOMORROW IS THE PERFECT DAY FOR YOU TO COME TO WEISFIELD AND GOLDBERG AND SELECT THIS WONDROUS GIFT. LAY AWAY NOW FOR CHRISTMAS!"

FOR FIVE DECADES, LAYAWAY WAS A FAVORITE FINANCING PLAN... EVEN FOR JOHN TRAVOLTA'S CHARACTER IN THE 1977 MOVIE 'SATURDAY NIGHT FEVER.

TONY:           "HEY, YOU GUYS DO LAYAWAY?"

SHOPKEEP:       "AS LONG AS IT DON'T TURN INTO A 20-YEAR MORTGAGE."

TONY:           "ALRIGHT, LOOK. PUT ME DOWN FOR 5 DOLLARS FOR THAT BLUE SHIRT IN THE WINDOW. HOLD IT FOR ME!"

SO HOW DID LAYAWAY GO OUT OF VOGUE? SIMPLE. CREDIT CARDS. IN 1980 CREDIT CARD COMPANIES WERE ALLOWED TO DRAMATICALLY RAISE THEIR INTEREST RATES. THAT LOWERED BANKS' FINANCIAL RISK, AND MADE IT POSSIBLE FOR THEM TO OFFER CREDIT CARDS TO PRETTY MUCH EVERYBODY.

AFTER YEARS OF INSTANT GRATIFICATION AND SKYROCKETING DEBT, THIS YEAR STORES, AND CONSUMERS, ARE GOING BACK TO LAYAWAY.

CASHIER:        "YOUR TOTAL IS 474.69 AND THE MINIMUM PAYMENT I NEED TODAY IS 47.47."

TIFFANY RENNIE: "I'LL PUT 70 DOWN."

TIFFANY RENNIE IS BUYING CHRISTMAS GIFTS FOR HER FAMILY. ITíS HER SECOND LAYAWAY OF THE SEASON AT KMART. THE COMPANY HAS OFFERED THE SERVICE FOR DECADES, BUT THIS YEAR IT'S LAUNCHED A BIG LAYAWAY AD CAMPAIGN. RENNIE SAYS EVERYONE SHE KNOWS IS DOING LAYAWAY THIS YEAR.

TIFFANY RENNIE: "A LOT OF THE MOMS WHERE MY DAUGHTER GOES TO SCHOOL HAVE BEEN STARTED TALKING ABOUT IT, AND THAT'S HOW I FOUND OUT ABOUT IT WAS A P.T.A. MEETING."

RENNIE HADN'T USED LAYAWAY FOR AT LEAST A DECADE. BUT THEN HER SITUATION CHANGED.

TIFFANY RENNIE: "I WAS JUST LAID OFF NOT TOO LONG AGO AND MY HUSBAND'S IN CONSTRUCTION SO IT'S STARTING TO SLOW DOWN FOR HIM AND WE JUST WANNA HOLD ON TO OUR CREDIT CARDS IN CASE WE NEED IT FOR THINGS IN THE FUTURE AND RATHER JUST PAY IT OFF OVER TIME RIGHT NOW."

SEARS REINTRODUCED LAYAWAY A COUPLE OF WEEKS AGO, AND BURLINGTON COAT FACTORY SAYS ITS LAYAWAY PLAN IS HUGE THIS YEAR. AT THIS KMART, MANAGER BOB HART SAYS CUSTOMERS HAVE LAID AWAY THREE TIMES AS MUCH MERCHANDISE AS LAST YEAR - HE SAYS IT'S TEN TIMES AT SOME KMARTS AROUND THE COUNTRY.

HART SHOWS ME THE STOCKROOM.

ANN:    "IS THIS ALL LAYAWAY?"

BOB:    "THIS IS ALL LAYAWAY."

ANN:    "WOW!"

BOB:    "AS YOU CAN SEE, THE MAJORITY OF ALL THAT IS TOYS, A LITTLE BIT OF CLOTHING..."

BY A LITTLE BIT OF CLOTHING, HE MEANS LONG RACKS PACKED TIGHTLY WITH BUNDLES OF OUTFITS. FROM FLOOR TO CEILING, IT'S GUITAR HERO SETS, TINKER TOYS, CROCK POTS AND STAND MIXERS - ENOUGH FOR A HUNDRED FAMILIES' CHRISTMASES, AND IT'S EARLY IN THE SEASON.

ALL OF THIS DELAYED GRATIFICATION WARMS THE HEART OF CONSUMER DEBT RESEARCHER LEW MANDELL.

LEW MANDELL:    "IT'S A WONDERFUL IDEA. YOU KNOW, THE WORLD USED TO BE FILLED WITH INCREDIBLE WAYS FOR PEOPLE TO FINANCE THINGS THAT THEY NEEDED WITHOUT GOING INTO DEBT AT OBSCENE RATES OF INTEREST."

MANDELL SAYS IN A PERFECT WORLD, WE'D ALL HAVE THE WILLPOWER TO SAVE A LITTLE MONEY EACH MONTH AND PAY CASH FOR EVERYTHING. BUT FOR MOST OF US, HE SAYS, LAYAWAY IS A GOOD ALTERNATIVE.

LEW MANDELL:    "IF THERE'S ANY SILVER LINING IN THESE TOUGH ECONOMIC TIMES, HOPEFULLY THINGS LIKE LAYAWAY PLANS ARE GOING TO BECOME VERY POPULAR. THE ONLY GOOD THING THAT CAME OUT OF THE GREAT DEPRESSION WAS IT CONDITIONED AN ENTIRE GENERATION TO REALLY NOT GET INTO DEBT."

MANDELL SAYS THERE'S ONE CAVEAT FOR CONSUMERS IN THIS ECONOMY. IF THAT BICYCLE STORE GOES OUT OF BUSINESS BEFORE YOU'VE PAID OFF YOUR RED BEAUTY, YOU'LL LIKELY NEVER SEE ONE RED CENT OF YOUR INVESTMENT.