Senator warns of layaway's cost

Yahoo/AP ^ | 11/14/11 | MICHAEL GORMLEY

[EBH]

The return of layaway plans this holiday shopping season is raising concern that the break from credit cards might actually cost consumers far more.

For example, a rock 'n' roll Elmo doll that requires a $5 layaway fee and a 10 percent down payment for a month can equal a credit card that charged more than 100 percent interest, U.S. Sen. Charles Schumer said Sunday.

Schumer is asking major retail associations to direct their members to more clearly present their layaway fees to customers. The Democrat says the ultimate cost of a layaway with a $5 fee can equal 40 percent interest over a month or two for many common purchases compared to the annual rates of most credit cards.

He said if stores don't better present the cost of layaway purchases, he will ask the Federal Trade Commission to determine whether the increasing use of layaway is a deceptive or misleading business practice. Historically, stores started dropping layaway plans in the 1990s in part because of these costs and inconveniences.

But it's wrong to compare layaway fees to credit cards and the fees are already clear, a major retail association says.

"It is a leap to suggest that $5 on a $100 purchase is twice the going rate on credit cards, which today averages 14.99 percent nationwide," said Brian A. Dodge of the Retail Industry Leaders Association.

"Layaway is not credit, period," Dodge said Sunday. "Layaway programs provide consumers with a responsible, low-cost alternative to credit cards that allow customers to buy an item that they want but the flexibility to pay for it over time without accumulating debt.

[knarf]

You mispelled,
"01100110 01110101 01100011 01101011 00100000 01111001 01101111 01110101 00100000 01100011 01101000 01110101 01100011 01101011 00100000 01110011 01100011 01101000 01110101 01101101 01100101 01110010 00100000 01111001 01101111 01110101 00100000 01110000 01101001 01100101 01100011 01100101 00100000 01101111 01100110 00100000 01110011 01101000 01101001 01110100 00001101 00001010"

It should be;

01100110 01110101 01100011 01101011 00100000 01111001 01101111 01110101 00100000 01100011 01101000 01110101 01100011 01101011 00100000 01110011 01100011 01101000 01110101 01101101 01100101 01110010 00100000 01111001 01101111 01110101 00100000 01110000 01101001 01100101 01100011 01100101 00100000 01101111 01100110 00100000 01110011 01101000 01101001 01110100 00001101 00001010 00000000.

So
As we say here in FR ...

There ... fixed it.

You're welcome.

[KantianBurke]

If you don’t have the money for said toy then you shouldn’t purchase it. Its called being responsible with your money.

[Rocky]

I guess what we need is another law or regulation, right? And little Chuckie is just the guy to give it to us.

[The Working Man]

I was reading this story while listening to a financial planner discussing, how people are still paying off the credit cards from last Christmas.

---

And this I think will be a key issue among ‘thinking’ households. This Christmas season is going to be VERY lean and in many ways I think that is a good thing. Christmas as devolved from a season of happiness and religious devotion to a mass orgy of blatant consumerism.

[EBH]

And actually creates ‘time’ for the family as the gifts are already bought months ahead of time. post 5

[StAnDeliver]

Ask yourself, why is Schuck Fumer doing this? To drive that money back to the credit card companies which feed his bankroll.

He knows that under government regulatory control, the big boxes will simply drop layaway, many of which have only brought it back in the latter half of this decade.

[Ken H]

I say it's "criminal" for Washington DC to set regulations for layaway plans that have absolutely zero to do with interstate commerce. If they can control us down to something as small as this, I ask you. Where in the world does their power end????

According to the self-described originalist Scalia, it is virtually limitless:

...the authority to enact laws necessary and proper for the regulation of interstate commerce is not limited to laws governing intrastate activities that substantially affect interstate commerce. Where necessary to make a regulation of interstate commerce effective, Congress may regulate even those intrastate activities that do not themselves substantially affect interstate commerce.

J.Scalia, concurring in Raich

[Graybeard58]

There is a cost to retailers to have layaway programs, that being items taken from the shelves but still remaining in inventory and taking up valuable space in the store’s backroom.

My local Wal-Mart rents semi trailers and keeps them behind the store for layaways, that can't be cheap.

[redgolum]

We use layaway to “hold” an item we want to purchase, but not hide, in our house. My little girl is pretty good at finding things.

Still, it isn't the preferred way to buy small ticket items.

[Eric in the Ozarks]

Let’s have a look at the stock purchase records of everyone in the US Senate.

[csmusaret]

Oh by the way; gasoline was $1.84 when Obama was immaculated.

[cableguymn]

ditto.. but I think the piece of #%%# is offended. It says Chuck is below it on the ladder.

[cableguymn]

We are always lean here. door buster deals (already stocked up on 1 dollar board games) are all we buy. buy right and you NEVER have to stand in a line.

our budget for Christmas this year was a 50 dollar bill. Still have about 20 bucks left and everyone (about 20) is covered as far as I know.

[xrmusn]

My local Wal-Mart rents semi trailers and keeps them behind the store for layaways, that can’t be cheap.
= = = = = = = = = = = = = = = = = = = = = = = = = = = = = =
Probably so, but wasn’t the ‘original’ concept of lay-aways that when one came to the store to pay their ‘fee’, they would inevitably spend money on something else that caught there eye?
Just like before the ‘me first’ society, if a merchant was good enough to cash your check, chances were pretty good you would spend (some of) your money in his establishment?

[autumnraine]

That’s assuming that someone would put ONE ELMO doll on layaway.

If you spend $150 on your kids for Christmas, that $5 is actually only 3%.

GAH!

[xzins]

Schumer is no mathematician. A 5$ layaway fee, if it is even based on 5 per 100, and I suspect it's based per layaway purchase and not per 100, is 5%. Trying to add any 10% down payment for the first month totally ignores that the 10% goes toward the cost of the item, thereby reducing the balance. It has absolutely nothing to do with any interest on the purchase.

Schumer is concerned with Christmas economic activity turning a huge sales month in December. This is based purely on his desire to get Obama a December bump in the economy, the same way as Christmas hiring gave Obama a bump in employment last month.

[jimfree]

Has the man never used a layaway program?

The moron has never worked retail either. There are storage and record keeping costs. And though layaway is not a credit purchase it is indeed a time and terms purchase.

[EBH]

Well in the case of Walmart if it is one of the stores with the grocery etc. too... the fee becomes part of the weekly trip.