Old-Fashioned Layaway Plans Find New Niche at Conn’s

With Depression-era roots dating back nearly 100 years, followed by decades of dormancy due to the rise of credit cards, and then, most recently, being eclipsed by the emergence of BNPL, the lowly layaway plan has largely been left behind in the world of consumer finance.

That is, until now.

“Over Labor Day weekend, we began including our layaway offering in our advertising for the first time and we saw one week of average sales each day from Saturday to Monday,” Conn’s HomePlus CEO Chandra Holt told PYMNTS, noting that the decision to expand the program this week to over 160 stores in 15 states was easy.

“Around 80% of our customers take advantage of some kind of financing option when they are shopping at Conn’s, since they are often purchasing a high-ticket item like a refrigerator or couch,” Holt said, adding that the layaway program was well-received by customers who either didn’t qualify for other financing options or who simply didn’t want to use credit.

At a time when many popular large items, such as appliances, can require weeks or even months of waiting to get delivery, Holt said the ability to make risk-free payments towards a major purchase and then pick it up in a month or two makes perfect sense for certain buyers.

“It’s been helpful for customers who are buying a home or moving in the future,” she said, noting that they not only can secure the specific product they want and lock in the price, but can have it safely stored for for free too,

Something for Everyone

To be sure, layaway is not for everyone, but then again, no payment plan is. As it is, most consumers prefer to take possession of merchandise immediately rather than waiting weeks or months to get their stuff, but in the case of Conn’s, Holt said that offering this option was simply another tool in the drawer to serve the entire credit spectrum.

“Conn’s already offers in-house financing, lease-to-own and our private label credit card,” she said, noting that the in-house financing option is similar to buy now, pay later (BNPL) and has been offered to customers for years.  “Now, we’re challenging ourselves to ask, ‘How can we make sure we have a payment option for anyone who walks into Conn’s, even if they can’t or don’t want to use credit?’”

As it turns out, failing to qualify due to lack of credit history or bad credit was the least cited reason Conn’s customers said they went with layaway, the company said, noting that just 7% of users fell into that group.  That’s compared to 35% who simply said they didn’t want to use any credit product and 58% who said they did so because they were buying a new home or wanted to lock in prices or inventory.

“Rising inflation is putting additional pressure on consumers and our goal with layaway is to offer more accessibility for all customers, especially during a time of economic volatility,” Holt said.

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