New service to attract budget-conscious online shoppers

Traditional shopping practices, such as layaway plans, are being phased out offline in favour of credit-based or delayed finance schemes. But now, thanks to a new online service, the budget conscious can log on to enjoy the benefits of layaway.

by Helen Leggatt

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Wal-mart ceased offering layaways in November, 2006, responding to customer demand for alternative finance options such as buy-now-pay-later. An online version of the traditional pre-payment system, eLayaway, could be just what online retailers need, to encourage responsible spending, attract those who can’t, or won’t, use credit cards and set themselves apart from other retailers.

“eLayaway gives more options to consumers and greater market share and volume to merchants,” said Matt Ryncarz, CEO of eLayaway.

Merchants will not pay transaction fees. Instead there is annual fee of around $300. Consumers pay a flat fee of 1.9 percent upfront, no interest and can set the frequency and amount of their payments. Items are automatically sent out on receipt of the final payment.

Wal-Mart ceased its layaway service due to lack of consumer take up. Credit cards and buy-now-pay-later schemes offer the shopper instant gratification, layaways entail waiting for weeks, or months, before receiving the item. Whether online shoppers, who demand fast loading websites, fast delivery and fast support services, can bear to wait for delivery remains to be seen.

No big names have yet signed up to the service, but if it will increase consumer reach, expand payment options and add to a company’s reputation, it could well be worth a closer look.