Two major retailers, Kmart and Sears, have announced they will offer Layaway to their customers. More than 1,000 other merchants have set up similar deals through eLayaway, which claims to be “The Smart Way to Plan and Pay.”

But is layaway really the smart way to pay for gifts?

Layaway (for those who may not be familiar with the concept) allows you to purchase merchandise on a payment plan. The store holds the merchandise for you (for a fee), while you make payments. When the item is paid for, it’s yours. Most stores give you an 8 to 12 week time frame to pay.

Layaway is popular for folks who have lousy credit and can’t get (or use) a credit card. And it’s popular for folks who are trying to avoid racking up credit card debt over the holidays.

Layaway is making a comeback.  And I’m not sure I like that.

You see, stores wouldn’t do it if it didn’t make them money.  In fact, that’s one reason Walmart quit offering layaway a couple of years ago. 

When customers put items on layaway, they ultimately lose.  You pay extra fees to put items on layaway, and the stores are oh-so-hopeful that you will miss a few of those biweekly payments.  Then, they can sell the merchandise to someone else and keep part of your money.

If you’re using layaway because  you can’t afford to pay the cash now, you need to do some major soul-searching about whether or not you need these items.  If you don’t have the discipline to save for purchases in advance, then for heaven’s sake, please don’t rely on a department store to do it for you.

Start your own layaway and go shopping Christmas Eve.  Cash is better than layaway.