Vacations on layaway called the way to go
That dream vacation that seems financially unreachable can now be had through an age-old payment method: layaway.
For as little as $100, you can book and start a payment plan for trips almost anywhere in the world.
“Layaway gives people flexibility and the ability to afford a vacation when everyone is watching their pennies,” said Laurie Bowden, vice president of strategic accounts at SearsVacations.com, a division of Sears Holding.
The buy-before-you-pay method has been around since the Depression, another time when credit was tight and jobs were scarce. Retailers have resuscitated the practice since the recession started as a means to encourage consumer spending. Consumers have used it not only to purchase big-ticket items and vacations, but also as a money-management tool.
“It has allowed more people to commit earlier to a trip and to commit more often,” said Marty Seslow, vice president of marketing and sales for Gate1Travel.com. “We are seeing more and more bookings early in the year for trips in September, October and November.”
Gate1 has offered a pay-as-you-go plan for many years, Seslow says, but didn't advertise it as a layaway program until its sales took a big hit in 2009. Since then, business has grown in double digits every year, and Gate1 is tracking bookings 30 percent above last year's record results — an increase Seslow attributes to layaways.
“It empowers the consumer with a little more choice,” he said. About 60 percent of his customers use the plan.
Only a handful of companies offer layaway vacation programs. Gate1 requires a nonrefundable deposit of $100 on most packages, though the payments for cruises and trips to some destinations are considerably higher. Sears Travel looks for 20 percent of the total cost of the trip, while Suzi Davis Travel in the Midwest wants $99 to book the trip. Westside International Travel, on the West Coast, will ask for $100 to $150 per person. Most won't charge you a service fee but may impose a cancellation fee.
The payments generally can be made on any time schedule you want, as long as the final payment is made 30 to 45 days before the trip (sometimes earlier for cruises and international trips). Travelers can book cruises more than a year in advance, but airfares can't be booked more than 11 months in advance. Some companies don't allow airfares on a payment schedule because the prices can change so quickly.
British Airways introduced a layaway vacation package earlier this year that entails a much heftier down payment. For flight-and-hotel and flight-and-car vacation packages between $3,000 and $3,499, a $900 deposit is required at booking. For holidays costing between $3,500 and $3,999, the deposit jumps to $1,050. Full payment is due 10 weeks before departure.
Bowden said she's experienced an uptick in family cruises with layaway plans. “It's not only for the budget-conscious, but it allows families to be flexible for bigger trips,” she said.
Average vacation costs vary widely, from about $1,500 per person, according to a 2012 American Express survey, to Gate1's average of about $2,500 per person. That adds up quickly if Grandpa and Grandma are taking the whole family on a cruise. A seven-day Alaska cruise in July through Gate1 costs roughly $1,600 per person, which includes flights from New York to Seattle. That would set a family of six back by about $10,000, or about $833 a month for a year, not including the down payment.
When spending that much money on a vacation as much as a year in advance — even with the layaway option — it might be advisable to take out travel insurance. That will cost an extra $100 to $149 per person.
Down payments and due dates will vary based on the destination and on the policies of the transport and hotels.
Jennifer Waters covers consumer topics for MarketWatch. She can be reached at email@example.com.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Look for 1st rate hike this year, Yellen says
- 5 battles the ’16 Camaro needs to win
- Truck ducts keep blowing out hot air
- Low price sparks sales run
- Consumer prices rose in April for 3rd straight month
- Stocks end quiet week with loss
- Murray, Alpha notify West Virginia coal miners of layoffs
- Developer hopes to make Allegheny Center a tech hub
- Pa. sees widespread job gains; jobless rate holds at 5.3%
- Murray Energy expects to lay off as many as 1,800 more
- BNY Mellon promotes executive