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NEW YORK (MainStreet) — Attention U.S. shoppers.

Layaway is making a comeback, as the skittish economy forces credit cards to the sidelines in favor of cash consumers use to pay for goods on a gradual, payment-by-payment basis.

Take Atlanta-based furniture retailer Classroom Essentials Online, which offers 90-day layaway option for large purchases. Or Sears, BestBuy (Stock Quote: BBY) and Walmart (Stock Quote: WMT), which have rolled out layaway programs of their own.

Why layaway? For cash-crunched consumers, layaway allows them to . . .

  • Avoid finance charges often levied when using a credit card or a line of credit.
  • Better manage cash flow by scheduling regular, in-advance payments, with no interest rate payments and no credit card bill after the purchase is made.
  • Lock in current pricing (even sale prices) with an upfront payment (usually up to 50% of the total purchase amount).

Layaway can also curb a consumer’s appetite for frivolous purchases. Few shoppers will go to the trouble of making 10 payments for an item they’re not passionate about or absolutely need in their lives.

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By and large, anyone fighting a tough economy can see the value of layaway, and many consumers are doing just that.

"There is a segment of consumers who have a hard time paying their bills,” says Ludwig Bstieler, associate professor of marketing at the University of New Hampshire's Whittemore School of Business and Economics. “In times like these, that group grows larger, and layaway offers them a way to purchase something without going beyond their means.”

For consumers looking at layaway plans as an option, the key, as in any savvy retail endeavor, is all about preparation, creativity and diligence. The tips listed below have all those elements, and can help you get to the finish line with your wallet and your psyche all in one piece:

  • When does the clock stop running? Job one for layaway shoppers is to figure out how much time they have to complete the purchase. If you miss the deadline, be prepared to pay a cash penalty of at least $10, the fee charged by retailers such as Toys ‘R Us and K-Mart. Also, expect to pay a nominal “service” fee of $5 to $10 per item.
  • Pay and wait. Even when you do pay your purchase in full, most retailers store your item offsite, and it may take an additional week or two to get the item. Factor that in as you close in on your final payment.
  • Make your regular payments. Retailers such as K-Mart (Stock Quote: SHLD) will OK a layaway plan with either an eight-week or 12-week timeline. They’ll ask for a down payment of at least 10% and will set up regular payments. If you miss a payment, you’ll get a seven-day grace period to make good. If you miss that, your order is canceled and you’ll get a refund – minus the service and cancellation fee.
  • Ask for a store credit. Consumers change their minds all the time, even with layaway plans. To make sure you protect yourself, ask for a store credit if you change your mind after several payments. If you can’t get a store credit, take a walk – you’ll probably get a better deal with another retailer down the road.
  • Factor in sale prices. If your item goes on sale after you’ve agreed to layaway terms, you could lose money on the deal. Better to ask in advance and make sure any future sale price is included in your layaway plan.

It’s also a good idea to check with the Better Business Bureau to see if there are complaints against the retailer before signing on the bottom line.

Make sure to go into any layaway agreement with your eyes wide open and your wallet only partially open. That’s all you’ll need to cut the best deal possible.