So is layaway an improvement in extending credit to customers? For most, probably not. The easy mistake would be to compare layaway free to carrying a credit card balance which incurs interest. In that comparison, layaway is obviously attractive. Nevertheless, to make a direct comparison of rates would be a mistake, as the credit services are different. With credit cards, consumers receive the product immediately. With layaway, they receive the product upon final payment. In a sense, customers do not actually need Walmart to offer a layaway program; they can simply start saving the money themselves. Layaway essentially offers Walmart an interest-free loan. Put another way, while credit cards allow consumers to enjoy their goods today and pay later, layaway reverses this transaction by allowing Walmart to enjoy the customer’s money today and pay back the customer in the form of goods later. Layaway thus represents a shift in credit away from consumers and toward corporations. So much for consumer protection!
via Layaway: Live after Death : The Freeman : Foundation for Economic Education.