With consumers leery of piling up credit card debt, more and more retailers are reviving a service that had been given up for dead: layaway.

Kmart began offering Internet layaway this year, and sister company Sears expanded its service to the Internet this year. Online site has seen its business grow. Toys "R" Us announced last month it would bring back layaway on more expensive items such as bikes and cribs, though not yet in Maryland.

Promotions for layaway - which allows consumers to pay for merchandise in installments - have picked up as stores prepare for a challenging holiday season. While layaway still isn't as widespread as it was years ago before credit cards became popular, BIGResearch says 11 percent of consumers are likely to use the service this holiday season.

"We kind of forgot about layaway and now it seems like it's back," said Jody Rohlena, a senior editor at ShopSmart magazine, which is published by Consumer Reports. "It's not everywhere, but I think people may try it, especially on big-ticket items."

Earl and Ayeesha McCloud plan to use layaway to buy Christmas gifts for their two young children this year. The couple, who were buying coats for their kids at Citi Trends in Northwest Baltimore recently, prefer layaway to credit cards because it helps them keep debt under control.

"It's better that more stores have it," Ayeesha McCloud said about the service. "We can get stuff and pay for it when we have all the money."

Amid a weak economy and high unemployment, more Americans are adapting the financial habits of previous generations, putting the plastic away and paying for things only after they save the necessary money. Credit card balances plunged by $10 billion in August, the 11th straight month of decline, according to the latest figures by the Federal Reserve.

"Consumers are more cautious about spending and therefore the thought of putting a product away, putting down a small down payment and paying for it later absolutely has appeal," said David Herskovits, a partner at Deloitte & Touche, which does retail consulting.

Other consumers are being forced to cut back as credit card companies slash credit lines and raise interest rates. Offers for 20 percent discounts for opening a credit card account aren't as common these days, because department stores also aren't extending credit so freely.

Layaway shoppers pay a small fee to have a retailer store merchandise while they pay for it in installments. In Maryland, the fee is up to $1 for purchases $500 or less, and up to $5 for anything that costs more. Shoppers usually have about 60 to 90 days to pay in full.

It's sort of the reverse of buying with a credit card. Consumers pay for an item over time, but they can't take it home until the balance is paid off. One benefit: avoiding credit-card interest rates of 20 percent or more.

Layaway isn't free from potential problems, however.

Fees add to the cost. And if a store goes out of business, the consumer will likely lose the merchandise, said Rohlena from ShopSmart. Maryland laws are more stringent and offer more protections than other states.

Tom Aiello, a spokesman for Sears and Kmart, said there were many skeptics when Sears reintroduced layaway last year.

"The customer response has really increased," he said. "It's a combination of factors. People may not be using credit as much or may not have access to it. A lot of people are cash consumers and they don't want to go into debt."

Sears and Kmart are offering Black Friday specials early this year in part so people can take advantage of layaway.

Many retailers are still reluctant to offer layaway, finding it tedious and costly. Layaway requires extra staffing. If someone decides ultimately not to buy the product, the merchandise was unnecessarily kept off the sales floor. Items that aren't picked up often have to be sold at a discount.

Walmart, the world's largest retailer, canceled its layaway program two years ago, saying the service wasn't widely used and was too costly to run. It does offer layaway on fine jewelry.

"It's a logistical challenge," said Marshal Cohen, chief industry analyst with research firm NPD Group. "Many retailers find it not worth having."

But in one of the toughest retail climates in years, some stores see it as another way to give themselves an edge.

The National Retail Federation has predicted a 1 percent sales decrease, the second-weakest holiday season since the federation began tracking sales more than 40 years ago. Last year was the only other time the retail trade group has reported a decline in spending, with sales dropping 3.4 percent in November and December.

"The hope is [consumers] will better budget their money and be able to get more out of their holiday shopping," said Aiello from Sears.

Stores that have been offering layaway for years, such as Citi Trends, Marshalls and Burlington Coat Factory, report greater interest.

"We have seen layaway increase throughout the year and do expect to see it more through the holiday season," said David Alexander, president and CEO of Savannah, Ga.-based Citi Trends, an off-price clothing store with several Maryland stores.

Mary Payton was at Citi Trends recently picking up an outfit her mother had put on layaway.

Payton, who works for a credit counseling agency, said she would rather use layaway than credit cards because the service doesn't include interest charges.

"I would like to see more big stores offer layaway," she said. "It would cut down on people going into debt."

Your Layaway Rights Under Maryland Law

* You are entitled to a written layaway agreement.

* For each payment, you have a 15-day grace period, and are entitled to a receipt.

* The store must give you the price set in the agreement even if it goes up. If the price drops within 10 days of the agreement, you get the lower price.

* You can cancel an agreement within seven days and get back all your money.

* If you cancel an agreement after eight days or don't make a payment within 15 days of the due date, the merchant can only keep 10 percent of the item's price or the money you've paid, whichever is less.

* If a retailer goes out of business, you are entitled to a refund, or your merchandise if you can locate the owner. In the case of a bankruptcy you are considered a creditor.

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