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In the days when multiple credit card offers were the norm, layaway looked like it had gone the route of the VHS videocassette: used, but only by a few, and many had been getting rid of it.

That is, until this year and the economic downturn.

Now, layaway - once the stepchild of credit - is the belle of the ball, experiencing a new popularity as consumers unable to get credit or unwilling to get into debt return to a pay-as-you-go mentality.

Layaway usually works like this: Customers choose the items they want, then pay a small service fee and a down payment to have the items set aside in the store.

Customers pay down the balance over a period of time, taking the items home when they are fully paid.

The service fees vary from store to store. Kmart charges $5 ; women's apparel store Cato charges $3 .

"This is built-in personal management of your finances," said Tom Aiello , a division vice president with Sears Holdings, the parent company of Kmart. "When you leave the store, your items are going to be paid for and you don't have to worry about any credit card hangovers in January."

Kmart has had layaway for decades, but it started emphasizing the service in circulars last month at the prompting of customers who said it would be important this year, Aiello said.

"When we did that, a lot of critics came out quickly and said Americans are far too into instant gratification and credit cards and layaway is irrelevant," Aiello said.

But customers proved them wrong, he said. "These 'frugalistas' out there think it's popular to get the items they want, get them at the price they want, but get it in their budget. Essentially that's what layaway allows them to do."

One of them is Kerry Price , who used layaway to put aside Christmas toys for her three kids.

She hadn't used the service in four or five years, but after this experience, she'll be back.

"We'll probably use it more often because it was easy," said Price, who lives in Sandy Ridge.

And there was an added bonus of snagging her gifts early: She got what she wanted.

"They had a good selection," Price said. "I was glad we went early and did it. Usually if you wait to the last minute, you have to pick through a bunch of stuff and the things that you want are gone."

Kmart declined to release sales information, but Aiello said there had been a "very strong, positive response" to the layaway service - so much so that Kmart's sister store, Sears, recently added layaway for the holidays.

That service may be extended if it proves successful, Aiello said.

At Cato, layaway has gained in popularity all year. "We have experienced an increase in layaway sales during all of 2008 and have seen a larger increase over the last two months," wrote CEO John Cato in an e-mail.

John Cato said that layaways typically average 3 to 5 percent of store sales annually, with use peaking around Easter and Christmas.

"Cato has always felt that continuing to offer the service is a great convenience for our customer in good economic times and bad," he wrote.

Layaway, which has its roots in the Great Depression, was largely eclipsed in the past two decades as economic prosperity grew and consumers lined their wallets with credit cards.

Walmart discontinued the service in 2006 , citing falling demand and rising costs, leaving the option at a smattering of discount chains, independent retailers and Web sites.

But for stores that sell wants instead of needs, even the layaway option isn't much of a help this holiday season.

Greensboro's SRS Motorsports, which sells motorcycles, all-terrain vehicles and watercraft, has offered the service for the past few years, and it's been a big hit with customers until this year.

"With the declining economy, I haven't got as much response," said sales manager Stephanie Ashley , adding that business was down 40 percent this year.

"It's been all economy driven. With the recession, people are losing their jobs."

The Associated Press contributed to this story.

Contact Lanita Withers at 373-7071 or lanita.withers@news-record.com