Explore why layaway declined, how modern alternatives took over, and whether the program might return in today’s retail world
Max Fischer via Pexels
You might have noticed the rise of "buy now, pay later" (BNPL) options at major retailers. They’re increasingly popular, as they let people buy things they don't have the cash for on credit, take them home right away, and then pay for them later in installments. BNPL loans have some experts raising red flags as consumer debt balloons, but did you know that people used to do it the other way around — by paying for things in installments and only getting them after the last payment?
This is called "layaway," and it used to be really common, but it's hardly found in the market today.
Picture the holiday rush unfolding in the 1980s, with shoppers lining up to reserve toys and electronics. They paid in installments until they finally took those items home. That method let people who lacked credit or full cash pay over time before picking up their purchase.
Today, that system feels nostalgic. Few retailers still offer layaway, yet its appeal lingered long after credit cards became widespread. This article explains layaway’s rise, why it faded, and how new solutions replaced it.
Layaway got its start in the difficult economy of the 1930s, during the Great Depression. At that time, retailers faced widespread cash shortages and needed a way to help customers pay over time before receiving goods. This provided access to necessities without credit risk or bad consumer debt.
The system remained popular as late as the 1980s and '90s. Shoppers buying on installment plans appreciated that no credit check was required, sought-after items could be reserved, and no interest was charged on the plan. In effect, this was like a reverse credit card that made budgeting manageable and opened higher-end shopping opportunities to lower-income consumers.
Major chains including Sears, Kmart, Burlington Coat Factory, Marshalls, and T.J. Maxx widely promoted layaway. Walmart $WMT even dropped the program in 2006 due to low demand and rising costs, only to bring it back during the Great Recession when credit was scarce. However, the chain phased it out again later.
At its peak, layaway was a viable payment tool and an inclusive marketing strategy, especially for holiday shopping and durable goods.
Layaway once offered shoppers a practical way to budget for big purchases, but over time, it lost its appeal. As new financial tools and shopping habits emerged, the once popular system gradually came to feel slower and less convenient compared with newer payment options. From easier access to credit to the rise of online shopping, several factors came together to make layaway less relevant in modern retail:
In the 1980s, credit cards became widespread with the advent of magnetic stripe technology, enticing rewards, and easier approval. Consumers felt drawn to instant ownership and convenience. Layaway required patience, in-store visits, and extra administrative work.
Over time, managing layaway became more complex and costly for retailers, who assumed responsibility for holding and tracking unpaid items. As online retail grew, traditional layaway didn’t adapt quickly. The shift toward convenience and tech-based options made older systems look outdated.
During the 2008 recession, layaway saw a brief revival as credit tightened and consumers sought alternatives. But once credit returned, most retailers phased it out again.
Credit cards largely replaced layaway by giving shoppers immediate ownership with delayed payment. They offer flexibility, rewards, and ease, but they carry a suite of well-known risks, including high interest and penalties for late payments.
More recently, buy-now-pay-later (BNPL) services such as Afterpay, Klarna, and Affirm have gained popularity. They let consumers split payments into installments, often interest-free, while receiving the item right away. These services are quick and can even help build your credit like a charge card does.
Modern layaway alternatives offer clear benefits:
Concerns remain about BNPL. Customers are still paying fees, and irresponsible use can get people head-over-heels in debt. Retail executives continue to offer BNPL options, indicating that installment payment plans remain a relevant part of the market.
Some retailers continue to offer layaway, especially for seasonal or big-ticket items. Burlington, for example, holds items for 30 days with a deposit and service fee. Gabe’s stores also provide layaway, requiring a deposit, a service fee, and a set payment schedule within 60 days.
These niche or discount chains show there remains a place for pay-over-time models. Layaway can appeal during holiday seasons or when budgets are tight. People who avoid debt or want structured savings may still find it attractive.
Because consumer behavior often defaults to digital convenience, layaway is unlikely to return as a mainstream choice. However, the principles behind layaway — delayed ownership and structured payments — still appeal to certain shoppers.
Join 500,000+ readers who start their day with Quartz.
By subscribing, you agree to our Terms of Service and Privacy Policy.
