SHOPPERS KEEP LAYAWAY ALIVE.

Byline: Brent Hopkins Staff Writer

An old favorite of penny-watchers has returned as shoppers feeling light in the wallet and wary of debt have rediscovered the layaway.

Reserving an item with the cash on hand and paying it off at convenience was once common practice for consumers but fell by the wayside as credit cards took center stage. But with layoffs mounting and Americans looking to avoid ringing up bills they can't afford, Aubie Goldenberg, a partner for Ernst & Young's Los Angeles office, thinks the time-tested payment plan suddenly looks fresher.

``When times are tougher, and the economy is not as good, you'd expect to see layaways increase as people look for alternative ways to finance their purchases,'' Goldenberg said. ``If you can wait, it's a good way to avoid a lot of debt.''

For retail giant Wal-Mart, the plan is a staple of payment. Shoppers put down 10 percent of their purchase price, then pay it off as they can in 60 days. If they change their mind in that period, they get their money back and the product is returned to the shelves, easing difficult return procedures for already purchased merchandise. Though the program isn't as well-known as credit card or cash payment, shoppers still make frequent use of the service, spokeswoman Sharon Weber said.

``I haven't done a layaway interview in a while,'' she said. ``But it's used quite a bit, and continues to be popular with our customers.''

According to consumer expert Kurt Barnard, president of Barnard's Retail Trend Report, massive debt from shoppers may contribute to the increased use of layaway programs.

``It makes a lot of sense, considering that credit card debt stands at - I hope you're sitting down - $704 billion right now,'' he said. ``Most people will limit their spending for Christmas and Hanukkah to just essential things, so they'll look for the lowest price and pay cash. (With layaway) you pay what you have in your pocket and that's that. When you charge, you don't feel the pain until the bill comes.''

Kmart requires a $10 or 10 percent deposit, then gives shoppers 10 weeks of biweekly payments to pay the bill in full. Spokeswoman Julie Fracker said the Troy, Mich.-based chain has seen steady use of the program.

``Typically, we see it for customers that don't have credit cards and want to buy a big ticket item,'' she said. ``It's very valuable to them, especially over the holidays. It's popular, especially in our urban locations.''

Not all chains reported such heavy use. Sears offers a year to pay off its purchases over $100, but sees less interest in the program due to frequent zero-percent financing deals on its store credit card.

``I had to look long and hard to find the policy on it,'' said spokeswoman Peggy Palter. ``People certainly don't use this as frequently as they used to. I got a phone call on this several years ago and that was the last I heard of it.''

But for the stores whose shoppers still do sign up for layaways, they're going strong, even in nontraditional ways.

``If you have nosy kids, this can be very useful around the holidays,'' said Wal-Mart's Weber. ``You can keep your purchase at the store without them poking through it. Layaway can be a great way to keep the secret of Santa.''