Before everyone had access to credit cards, many retailers offered layaway plans, letting shoppers pay in instalments and storing their purchases until payment had been made in full. As the general trend moved from 'live within your means' to 'buy now, pay later', layaway faded away. Walmart stopped offering the service in November, and most other retailers have also switched to delayed payment plans that offer customers the instant gratification they're looking for.
But every trend has its counter-trend. Florida-based eLayaway is taking layaway plans online, offering consumers flexible payment schedules without mounting interest fees. How it works? When shopping with a participating merchant, members choose eLayaway as their payment option. They pay a one-time transaction fee of 1.9% upfront, and can then set the payment schedule that fits their budget. As soon as full payment has been made, the purchased product is delivered. If customers want to cancel a purchase, they're refunded whatever they've put down, minus a USD 25 cancellation fee.
eLayaway aims to offer a fiscally responsible alternative to credit-based payment solutions, forcing customers to plan ahead for purchases and 'setting them free' from credit cards and excessive finance fees. The service has been integrated with several online stores, with many more on the way. (No big names, so far.) The major benefit for retailers is that eLayaway offers them a way to tap into a growing market of consumers who have overextended their credit. Merchants pay an annual membership fee of USD 299, and no transaction fees.
This is a concept that would work anywhere consumers are facing a credit pinch. And if you're a retailer selling big-purchase items, from cruise trips to wedding rings, look into working with eLayaway as a customer-friendly payment plan.
Website: www.elayaway.com
Contact: info@elayaway.com
Spotted by: Sergio Pinon
Most banks pay their customers interest to save their money with them. eLayAway seems to be charging a fee for the same service... great business unless today's sophisticated, and more affuluent, consumers no longer feel the need for artificial suppports to help them save money...
this is an excellant concept with a mind boggling opportunity all lined up fer it.. It seems all too fair enough..I wonder how long it'll take for this trend to catch up.. Anyways..good for the consumer..good for you..
Conceptually, it's easier to save via paying a small amount to a third party where you don't have access to the funds after making the payment. Saving in account you have ready access to makes it too tempting to raid that account for day-to-day expenses, such as unexpected medical costs and child care expenses.
Still, Mr/Ms Barnett has a good point. If consumers park their money with eLayaway, eLayaway can and should invest those funds in short-term investments and return a bit of that return as interest on the consumer's loan to eLayaway. The current fee reminds me of the way German banks used to charge patrons money for the privilege of saving with them. Along came Citibank, which implemented the American paradigm, and German banks had to follow suit.
I understand now that this company charges $99 a month for a merchant to use. That is $1188.00 per year. NO WAY!
To be honest the merchant can do this them selves why would you need a third party to do this scheme?