On Friday, Kmart joined Toys 'R' Us and Walmart in heralding an ever-more competitive layaway program.
Broadcasting the news on the opening of its web page, Kmart announced it is waiving the fees that shoppers pay to open its interest free, pay-over-time program through Nov. 17. Sears, its parent, will have a similar program in October, but specific dates are not finalized. Both Kmart and Sears have until now charged $5 for an 8-week layaway contract and $10 for the 12-week program.
Reacting to customer feedback, last Wednesday, Walmart said it was lowering its holiday layaway program fee to $5 from $15. Shoppers get a full refund in a form of a Walmart gift card when they make their final layaway payment.
Walmart dropped layaway for anything but jewelry in 2006 but brought it back last year. As reported, the new program, which starts Sept. 16 and runs through Dec. 14, will last a month longer than last year's and will include small home appliances and big-ticket sporting as well as the toys and electronics featured last year.
Last Monday, Toys 'R' Us Inc. said it was eliminating the upfront service fee for layaway orders created in-store from Sept. 4 through Oct. 31. After Oct. 31, a $5 service fee will apply. Toys 'R' Us revived its layaway program in 2009 after a five-year hiatus and expanded it last year to include nearly everything in the store.
Jai Holtz, VP of financial services for Sears Holdings, told the Associated Press that Kmart's decision to waive the fee wasn't in response to its rivals' moves. A no-fee trial was being tested at 80 of its 1,200 Kmart doors during the past few months and had been well received by shoppers. Mr. Holtz said shoppers "are watching the money they spend," and "customers continue to require more value."
Other retailers offering a layaway program include Best Buy, which charges a 5 percent fee although it doesn't apply for sales items or some cellphones. T.J. Maxx and Marshalls charges a $5 fee for their layaway program.
- Layaway available on hundreds of items year round - Sears Holdings
- Now On Rollback at Walmart: Holiday Layaway Fees - Walmart
- Toys"R"Us Introduces Enhanced Holiday Layaway Program With No Upfront - Toys 'R' Us press release
- Kmart Removes Layaway Fees to Help Boost Holiday Shopping - Bloomberg News
- Kmart drops layaway fees through Nov. 17 - Associated Press
- Kmart follows Toys R Us and drops layaway fees - USA Today