Walmart Plans An Early Launch Of Its Layaway Program

Wal-Mart (NYSE:WMT) has decided to launch its layaway program a month in advance this holiday season. The program enables customers to pay a small charge for the option to pay for products in installments without paying any interest. In other words, the store holds onto the merchandise until the customer clears the account. Wal-Mart, which will run the program from September 16 through December 14, believes the early launch this year will give parents more time to shop and pay. We have a $77 price estimate for Wal-Mart’s stock, which is at a premium to the market price.

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Retailers devising ways to connect with customers

Wal-Mart has modified the layaway program vis-a-vis the one launched last year. This year, it will cover small home appliances and sporting goods apart from the usual toys, electronics and jewellery products. The program, which was launched on October 17 last year, had received a great customer response.

The retailer has also modified the fee for the program this year. It requires a down payment of $10 or 10%, whichever is greater, and a $15 open fee. Last year, the open fee was $5. Eventually, the open fee will be refunded in the form of Walmart gift card after the final payment is made by the customer. For a transaction to qualify for the program, the individual items must be priced $15 or more, and the total purchase must be at least $50. ^[1]

It has become necessary for the retailers to offer value deals as a way to attract customers that are struggling from weak economic conditions and high unemployment rate. Such programs, which give the customers the option to defer payments while holding the gifts for their loved ones, is a sound initiative by Wal-Mart to connect with its customers. It also helps the retailer win new customers while retaining its loyal customer base.

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1. See: Company Website [↩]