Early in 2007 I predicted the evolvement of the new economy as we are experiencing in the Fall of 2008. At that time I recommended that smaller retailers consider the creation of a Retail Layaway Program for the Christmas Season of 2007. Some took note and have done well, particularly as consumer credit has tightened up.

It's worth revisiting this concept and it's more critical in 2008 than it was last year. Towards the end of the 1980's, most retailers abandoned Layaway programs because consumer credit became so prolific regardless of the financial status or age of the customer.

In simple terms, a Layaway Program enables customers without credit to put a small deposit on an item or group of items in your store, and then make payments until the entire balance is paid. At the time of the last payment, the customer takes the goods home.

We're a little more than six weeks to Christmas. This would give customers 6 one week payment opportunities to pay off purchases in your store and take them home for Christmas.

Layaways can be short term credit extensions to customers, typically 60 days. They can induce customers to buy and they generate some instant cash flow as well. Most of all, stores that offer a Layaway Program in the new economy of tight or non existent credit will build solid loyalty and dramatically differentiate themselves from their competition. A Layaway Program puts you a cut above your competition in regards to your Unique Sales Proposition (USP).

Most Point of Sale systems can accommodate a Layaway Program and keep running tabs on balances and payments. If you can't simply create a transaction SKU and use that as your layaway tracking system.

I've created a simple Layaway Form that you can use instantly. It prints out on letter sized paper, fits in a three ring binder and the customer stub is the size of a dollar bill and can be easily carried in a man's wallet or woman's purse.

Not surprisingly, many large retailers like K MART are offering Layaway Programs right now as well to improve sales, cash flow in a loyalty too.

The Layaway Program, once forgotten by retailers has a critical place in our new economy.

If you would like the free form, just email me at ronp@retailinstitute.ca and get a Layaway Program established immediately.

TAKE ACTION TODAY

1) Set up your cash system to handle layaways or assign a SKU to track them. 2) Use the transaction number as the layaway number. 3) Email for the layaway form in Adobe pdf format. 4) Place signs in your store and at cash informing customers that you now offer layaways. 5) Establish and review your layaway program with employees such as minimum deposits, maximum length, return policies etc. 6) Add your new layaway program to all advertising.

HANG IN THERE!