Did you realize that October 5 to 9 was National Layaway Week? Value retailer Kmart did—after all, they called the holiday– and celebrated by launching an online center where customers can find, hold and make installment payments for the items they want to pick up in-store and give this holiday.

The online layaway feature lets customers locate a store participating in the program by entering their ZIP code at www.kmart.com. They can also look for a special layaway icon against selected products in online commerce and indicate at checkout that they want to put those items on layaway at their local participating Kmart store.

The icon indicator is needed because items have to be physically available in the store at the time of the order to be held on layaway.

Customers pay a $5 initiation fee to start a layaway contract and must pay either $15 or 20% of the total purchase price of the items they want to place on layaway at the start of the contract. They then make four payments of 20% of the total purchase of the merchandise over the eight-week hold period.

Once those payments are complete, the customers who opened the layaway accounts can pick up the merchandise, but only at the store contracted with. They must pick up merchandise within 25 days of making the last payment. If they miss a biweekly payment by seven days, Kmart can return the items laid away into stock.

Online, customers can use their checkout receipt number to sign into the payment center and make their layaway payments with a credit card, debit card, Kmart gift card or Kmart cash card. Shoppers can also make their biweekly payments in the store in which the layaway order is being held. E-mail alerts will remind shoppers of payment due dates.

Kmart parent company Sears Holdings Corp. is also extending the online layaway feature to its Sears retail brand, with the same shopping and payment rules but some difference in payment terms.

“We have an entire generation of customers that grew up shopping online,” Kmart CMO mark Snyder said in a release. “Launching online layaway at Kmart engaged these customers by allowing them to spread their payments out over time and better plan their spending.”

Kmart says it saw double-digit6 increases in its layaway customers and sales last year after an online/offline campaign to promote layaway—a feature that its big rivals in the value segment, Walmart and Target, discontinued in 2006.

Even more consumers this year are 3expected to be grappling with paying down credit-card debt or facing sharp cutbacks in their credit limits. So ideas that make paying for holiday gift in cash—like layaway, or like the Christmas savings clubs that Sears and Kmart rolled out in August—may have even greater appeal this year.

According to Kmart, users searched on the term “layaway” twice as much this past August as they did in the same month in 2008.

Did you realize that October 5 to 9 was National Layaway Week? Value retailer Kmart did—after all, they called the holiday– and celebrated by launching an online center where customers can find, hold and make installment payments for the items they want to pick up in-store and give this holiday.

The online layaway feature lets customers locate a store participating in the program by entering their ZIP code at www.kmart.com. They can also look for a special layaway icon against selected products in online commerce and indicate at checkout that they want to put those items on layaway at their local participating Kmart store.

The icon indicator is needed because items have to be physically available in the store at the time of the order to be held on layaway.

Customers pay a $5 initiation fee to start a layaway contract and must pay either $15 or 20% of the total purchase price of the items they want to place on layaway at the start of the contract. They then make four payments of 20% of the total purchase of the merchandise over the eight-week hold period.

Once those payments are complete, the customers who opened the layaway accounts can pick up the merchandise, but only at the store contracted with. They must pick up merchandise within 25 days of making the last payment. If they miss a biweekly payment by seven days, Kmart can return the items laid away into stock.

Online, customers can use their checkout receipt number to sign into the payment center and make their layaway payments with a credit card, debit card, Kmart gift card or Kmart cash card. Shoppers can also make their biweekly payments in the store in which the layaway order is being held. E-mail alerts will remind shoppers of payment due dates.

Kmart parent company Sears Holdings Corp. is also extending the online layaway feature to its Sears retail brand, with the same shopping and payment rules but some difference in payment terms.

“We have an entire generation of customers that grew up shopping online,” Kmart CMO mark Snyder said in a release. “Launching online layaway at Kmart engaged these customers by allowing them to spread their payments out over time and better plan their spending.”

Kmart says it saw double-digit6 increases in its layaway customers and sales last year after an online/offline campaign to promote layaway—a feature that its big rivals in the value segment, Walmart and Target, discontinued in 2006.

Even more consumers this year are 3expected to be grappling with paying down credit-card debt or facing sharp cutbacks in their credit limits. So ideas that make paying for holiday gift in cash—like layaway, or like the Christmas savings clubs that Sears and Kmart rolled out in August—may have even greater appeal this year.

According to Kmart, users searched on the term “layaway” twice as much this past August as they did in the same month in 2008.