• by Thom Forbes  @tforbes, September 9, 2011

As optimistic as it appeared that retailers might be about the holiday shopping season on Tuesday, it turns out that the behemoth of them all, Wal-Mart, is not so optimistic that it isn't resorting to some old-fashioned allure: the layaway plan.

If you're asking yourself if you've seen this story before, you're probably thinking of the Wal-Mart of another century, Sears, which brought back its layaway program in 2008 after a two-decade hiatus. But Wal-Mart itself only discontinued its program five years ago.

"Popular during the Great Depression, layaway programs had all but faded away by the turn of the century as shoppers turned to credit cards to shop," writes Andrea Chang in the Los Angeles Times' Money & Co. blog. "But layaway has made a comeback since the most recent recession because it enables shoppers to select their items early and pay off those purchases in a series of small payments; retailers will hold the items during that time and typically don't charge interest."

Wal-Mart says that "repeated pleas from customers, including Facebook campaigns and online petitions" is the impetus for the change of heart, Ylan Q. Mui reports in the Washington Post. "Chief Merchandising Officer Duncan Mac Naughton said high gas prices, constrained home values and the tight job market are the biggest challenges facing Wal-Mart shoppers," Mui writes.

Stephanie Clifford reports in the New York Times that it's unusual for Wal-Mart to be a "holiday season follower," pointing out that Toys "R" Us also instituted a layaway program for expensive items in 2009 and that Sears' Kmart division has had a plan for decades.

There are restrictions in the Wal-Mart program. "Only toys and electronics may be paid for on layaway, starting Oct. 17 and ending Dec. 16. Each item must cost $15 or more, and the total layaway purchase must be $50 or more. There is a $5 service fee, and a 10% down payment is required," reports Clifford.

The company feels that by limiting the items offered it can "avoid the pitfalls it cited when it phased out layaway in 2006, citing diminished demand," Miguel Bustillo reports in the Wall Street Journal. "The retailer said then that the layaway program created backroom clutter from all the half-purchased items held in storage."

Citigroup analyst Deborah Weinswig likes what she sees. "It's very strategic and focused," she tells MarketWatch's Andria Cheng. "This is another initiative to get back to positive [same-store sales] territory. It's a difficult environment. It's a cheap financing tool for their customers. This is a traffic driver."

Federal Reserve chairman Ben Bernanke, meanwhile, yesterday described consumers as "too bleak," as the hed over Binyamin Appelbaum's story in the New York Times has it. "Oh, sure, there are reasons to be depressed, and the Fed chairman rattled them off: 'The persistently high level of unemployment, slow gains in wages for those who remain employed, falling house prices, and debt burdens that remain high,' Appelbaum writes. "However, Mr. Bernanke continued, 'Even taking into account the many financial pressures that they face, households seem exceptionally cautious.'" But Mark Gongloff called the speech a "snoozefest" in a Wall Street Journal blog that carries the hed: "Bernanke Repeats Jackson Hole Remarks, Drawing Wrath of Market Robots." (I didn't know robots got drowsy, did you?)

Indeed, most Wall Street roundup stories for the day point out that the stock market wasn't enraptured by Bernanke's rhetoric: some reports have it "tanking," others "shedding." Fox News decided thusly: "Bernanke Speech Sinks Wall Street" Here's the straight and narrow, from AP via USA Today: The Dow closed down 119.05 points or 1%; The Standard & Poor's 500-index fell 12.72, or 1.1%; the Nasdaq shed 19.80, or 0.8%.

How the market reacts to President Obama's "impassioned" speech last night that offered up a bigger-than-expected jobs-creation proposal is anybody's guess over the long haul of the day. But MarketWatch's William L. Watts writes that "U.S. stock-index futures pointed to a slightly lower open ... with investors finding little solace" in the plan.

Lots of questions this morning but, thankfully, we have an entire weekend to mull over them.