May 14, 2009, 12:00 AM

When the climate outside is frightful, but the rugs are so delightful...

In response to the economic storm, Rugs Direct is testing in advance of the holiday season a new layaway program it hopes will help close sales with customers whose credit cards are full or who are eschewing credit cards for cash.

Paul Demery

Managing Editor, B2B E-commerce

When it comes to cash and credit, 2009 has been a tough year for retailers-and consumers, too. This is why catalog and web retailer Rugs Direct is testing a new layaway program. And if the test is successful, it will promote it full force in the fall to encourage buying holiday gifts sooner rather than later.

“After seeing the success of Sears and Kmart reinstating their layaway programs, we decided to jump on that on the Internet, and do so soon enough to have that ready for our busiest selling season, which is fall through the holidays,” says David Craig, CEO of Rugs Direct, No. 317 in the Internet Retailer Top 500 Guide.

As it stands today, the program enables customers making purchases greater than $150 to take 60 days to pay. The retailer ships the product when full payment is received.

Rugs Direct decided to try the layaway program as a direct response to the faltering economy.

“There are many credit-strapped consumers who have run their credit cards up and don’t have the cash flow, and we don’t want to lock those consumers out of our web site,” Craig explains. “If they can break it up into multiple small payments they still can make that purchase. And between now and the end of the year there will be more of those types of consumers out there.”

Rugs Direct is testing layaway-as well as the ability to mail in a check-now in anticipation of the fourth quarter.

“We want to get some idea of if they are worthy to include in our fall and holiday catalog pages,” says Randy Kremer, president. “It would be nice to give our customers the ability to purchase early in the fall on layaway for Christmas.”

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