Layaway returns to stores: Good option for you?

With the holidays approaching and the economy still hurting, Walmart has joined the hoard of retailers giving customers an old option. The nation's largest retailer is letting people buy toys and electronics on layaway - for the first time in five years. Other big chains that now offer layaway include Sears, Kmart, TJ Maxx, Marshall's, Best Buy, Toys 'R' Us and ELayaway.

But why turn to layaway now?

Consumer expert Regina Lewis said, "A lot of us grew up with layaway, and then in the heyday, people in the '90s said, 'Throw it on my credit card.' Those days are over. Walmart is looking at a landscape when 55 percent of their consumers are now paying cash, and there are clear indications they are living paycheck-to-paycheck,  if you're lucky to get a paycheck these days. So when you look at an exceptional retail event, like the holiday season, people need a practical solution for the holiday season. Layaway may be a good one."

How does layaway work?

Lewis explained, "Generally, the model works like this: You put 10 percent to 20 percent down on the item, so on a $100 item, that is 10 bucks. Then you sign up for a payment schedule -- usually over 30 or 90 days. There is a one-time fee ($5 to $10) that covers their cost to take it off the floor, store it in the back. If you have to cancel at any point, a nominal charge, (such as $5 or $10). Not a ton of downside."

So when does layaway make sense for you?

"People are maxed out on their credit cards and being denied. If you are trying to build your credit, layaway, being responsible with the payments won't help you, but this is key: It also won't hurt you. So unlike applying for or opening a new credit card, it's not going to affect your credit score. That is important to a lot of people. Also, people have fluctuating income. Maybe you can afford part of it now, more the end of the month, or (you're) expecting a year-end bonus or a commission payment or selling your home. Locking in the sale or clearance price can be a good move. If the price drops, the vast majority of the time, they will adjust it for you."

But, "Early Show" co-anchor Erica Hill noted, "Black Friday is not that far away. If only like two months, say, away from the real start of the holiday shopping season, isn't it better to wait for some of those deals?"

Lewis replied, "We know TVs and laptops will be on sale on Black Friday, but it's usually not the top sellers or the top-of-the-line. If you have a child that's begging for a certain laptop, you can go to Best Buy and take advantage of their lay-away program and, boom, for a $50 fee, you lock in the initial down payment and then you would pay over the next 12 weeks. At the beginning of December, you would own the item outright. You can take it home. At the end, you would pay $1,050 for (a $1,000) laptop. Here is the reality: If you wait until the end of December and say, 'I'll splurge and get it and put it on a credit card.' If you don't pay that off for six months, that laptop doubles in price. Suddenly the $50 looks pretty darn good."

So why not just save up the money and buy it later?

Lewis said, "If we were all that great at saving! If we had that sort of forced discipline, we wouldn't be walking around with credit card debt, dare I say, from last holiday season. It's about forced discipline."