The outmoded financing option has new life this holiday shopping season as many people, weary of credit since the economic downturn, opt for alternative payment plans.

Layaway allows people to buy items they can’t pay for in full without being charged interest. The buyer makes a down payment of around 10 to 20 percent and cannot take the item home until it is completely paid off.

The customer has typically 30 to 90 days to pay off the balance.

Fred Elsberry, president and CEO of the Better Business Bureau of Metro Atlanta, Athens and Northeast Georgia, said the economy is the main reason people are putting away their credit cards — with high interest rates and reduced credit limits — and seeing layaway as an attractive option again.

"If they think in advance, they can get their Christmas without having to pay the extra fees," Elsberry said.

Elsberry said K-Mart saw double digit increases in 2008 layaway sales year over year.

"The option has been there all along," Elsberry said. "A lot of consumers got away from it as credit became easy. But I think those same factors are working in reverse now to make it popular with consumers."

While big box stores like K-Mart have been heavily marketing their layaway option for holiday shoppers, local retailers are seeing more interest in layaway as well.

Larry Davies, an employee at Shuler’s Great Outdoors in Gainesville, said the store has always offered a layaway option, but it has been more popular over the last year or so.

"More people are holding on to their money right now," Davies said. "We have quite a few layaways right now."

Davies said a number of people have already come in to put large gift items, such as guns and rod-and-reel sets, on layaway for the holidays.

But the store also is holding less expensive items on layaway, such as knives and boots.

"There are items being put on layaway that normally would not," Davies said.

Mary Paglia, owner of Upper Deck Skate Shop in Gainesville, said layaway is an option that fits well with her merchandise. Because she sells a number of specialty products, it is advantageous for people to shop early, even if they can’t pay up front.

"Some (skate) boards are only produced for just a few months or a few weeks and you can never get it again," Paglia said. "I might not be able to get the board they want as it gets closer to Christmas so it’s a way to secure the board that their child wants, even though they’re not capable of paying for it early on."

Paglia asks for 25 percent of the purchase as a down payment and then allows 60 days to pay the remainder.

The only drawback to layaway is when people fail to follow through on the layaway agreement, Paglia said.

"It takes the product off the shelf for a buyer that could come in and buy it immediately," Paglia said. "But in the seven years prior to this, I’ve only had one person that did not show up to pick up their Christmas layaway."

Elsberry said customers should do some research before shopping on layaway.

"The first thing you want to do, and most large companies have this, is the terms and conditions of their layaway in writing," Elsberry said.

The main things to understand are how much time you have to pay the item off, when the payments are due, how much the down payment is, and if there are any extra fees such as storage or service plans.

Elsberry said there are also some additional questions people may want to ask.

"The important question is if I miss a payment are there any penalties? Does the item return to inventory?" Elsberry said. "And what happens if the item goes on sale?"