Walmart tweaks layaway fees to match rival
Walmart this week modified a layaway program that had yet to begin after Toys "R" Us said it wouldn’t charge a service fee and lifted minimum purchase requirements for its program.
The layaway saga began in late August when Walmart said the start date of its layaway program would begin on September 16, a month earlier than the prior year. Curiously, Walmart also said at that time the fee to open a layaway account would increase to $15 from $5 the prior year.
Toys "R" Us spotted the opening and early Tuesday morning said its layaway program would begin immediately and customer who created orders before October 31 wouldn’t be charged a service fee.
"Providing our customers flexible payment terms, without requiring an upfront service fee, is our most attractive layaway offer yet," said Troy Rice, EVP of stores and services for Toys "R" Us 875 stores U.S. division. "We continue to look for ways to help our customers stretch their budgets, and by taking advantage of this free layaway option, they can make a series of small payments over time, as they begin to think about what might be on their children's holiday wish lists."
Not to be outdone, hours after the Toys "R" Us announcement, Walmart said it was "rolling back" the $15 service fee it had yet to begin collecting to the prior year’s $5 level.
"This is a direct response to feedback we received since announcing this year’s holiday layaway program," said Duncan Mac Naughton, Walmart’s chief merchandising and marketing officer. "Customers who make their final payment will receive a refund of the $5 fee on a Walmart gift card. We believe this rollback strengthens our layaway offering. It’s even more attractive to our customers and makes Walmart more competitive in the marketplace."
Other terms of Walmart’s program are comparable to last year such as a requirement for a down payment of $10 or 10% of the purchase price, whichever is greater, but the company no longer collects a cancellation fee of $10 as was the case last year.
Toys "R" Us said after October 31 it will charge a $5 fee and other rules will continue to apply. For example, regardless of when the order was created, there is a 20% down payment requirement and shoppers have 45 days from the time the order was initiated to pay for at least half of the their order. Orders must be paid in full by and picked up by December 16 or there is a $10 cancellation fee.
The biggest difference in the programs at the two retailers is the categories of merchandise eligible for layaway. All toys in its Toys "R" Us stores and most items at Babies "R" Us store are eligible for layaway, in comparison to when the program was first launched and merchandise categories were limited to large items such as bikes, swing sets, dollhouses and play kitchens. Since then, additional categories of merchandise were added such as video game hardware and tablet computers and last year saw expansion to virtually all merchandise categories. Excluded from the program are categories such as batteries, diapers, candy, food and formula, some seasonal items, health and beauty aids, apparel and doorbuster deals.
At Walmart, the list of merchandise categories also was expanded this year after the program was reinstituted last holiday season. Walmart has added small appliances and select sporting goods such as basketball goals, trampolines and large exercise equipment to electronics, toys and jewelry as categories eligible for layaway.