By Kelli B. Grant
With just a little more than five weeks to go before Christmas, shoppers have largely missed out on the opportunity to participate in retailers’ layaway programs — which usually hold to an eight-week payment schedule and don’t hand over the gifts until purchases are paid in full.
But experts say there are still options available to those who want to break up the price of holiday gifts into more manageable payments.
HSN announced Monday afternoon that it would double to 10,000 the number of items available for its FlexPay program, which lets shoppers split purchases into two or more equal payments without paying additional fees or interest. The gifts ship right away, and new payments are charged to the shopper’s debit card, credit card or PayPal account every 30 days until the purchase is paid for in full. “Layaway — that’s really a dated concept,” says Bill Brand, executive vice president of programming, marketing and business development for HSN.
Sears and Kmart, meanwhile, are offering store cardholders a choice of extra reward points or deferred financing on purchases made before Jan. 28. BillMeLater, a PayPal subsidiary that lets shoppers put purchases at partner retailers on a line of credit, has also expanded its roster, adding Hammacher Schlemmer and Charlotte Russe to its list of nearly 600 stores. Users can pay off purchases immediately or over time at an interest rate of nearly 20%.
Buy now, pay later offers are fairly common this time of year, but shoppers should be cautious before using such services, says Gail Cunningham, a spokeswoman for the National Foundation for Credit Counseling. “The company is making money somewhere,” she says. That might be revenue from fees or interest, a slightly higher price tag on items, or the added business of you deciding to shop there instead of with a competitor. Most also require an instant credit check for approval, so those with poor credit may not be eligible.
As with paying by credit card, there’s also some risk that repayment deals could prompt people to buy or spend more than they originally intended. “They’re committing money they have yet to earn,” Cunningham says. “That’s very dangerous in this economy.” Shoppers should make sure their purchases are still in line with their budget, she adds.