If you've never used a layaway plan to make holiday purchases, now might be the time to try it.
In an effort to spur spending ahead of the typical holiday shopping season, many retailers are cutting upfront fees they usually charge customers to use their layaway plans.
Layaway allows customers to hold items at the store for a period of time while they make regular payments to cover the total cost. Once the purchase has been paid in full, customers can collect their merchandise.
"It's basically a way to make it easier on our customers that may not have all of the funds at the time," says Bill Kinney, store manager of Kmart in Cedar Rapids, Iowa. "It's a great way to shop for the holidays, because we hold it for them and they don't have to hide it at home."
For layaway purchases made by Nov. 17, Kmart is waiving its typical $5 service fee for eight-week contracts and its $10 service fee for 12-week contracts.
"If it's something on sale, it may not be on sale three weeks from now, so they can put it on layaway and get locked into that lower price," Kinney says.
Other retailers are offering more attractive layaway plans for the holidays, too.
Walmart, for instance, reduced its upfront fee of $15 to $5. Customers will get the fee back in the form of a store gift card once they've completed their payment plan. Toys R Us is offering free layaway on purchases made by Oct. 31.
Many layaway plans require a down payment, have exclusions or charge a cancellation fee, so make sure you understand the contract upfront. And, before you head to the stores, follow some budget basics for guilt-free holiday shopping.