8.2 percent of American households are "unbanked" and have no bank account. A further 20.1 percent classify as "underbanked." They have an account but have used an alternative financial product at least once during the year.
All that means consumers are still spending, but they're paying for it without plastic, keeping their cash somewhere besides a traditional bank account, and minding their pennies.
"I'm trying to get ahead of the game," said Margo Cobbs, 53, getting out the cash from her purse to put a 10 percent down payment on her layaway. The program lets her start her holiday shopping early. "I'm not going to deal with Black Friday, fights, crowds, I've been there." She's putting $21.79 toward a Doc McStuffins Doctor's Bag Playset, Lalaloopsy Loopy Hair Doll, Disney Princess Royal Musical Microphone, a remote control helicopter and other toys for her grandkids.
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Behind the counter, Kmart layaway specialist Kerri Ann Genus flips through the store's weekly circular, finding Cobbs $30 in extra savings. She says that per Kmart's terms, Cobbs must come in at least every two weeks for eight weeks to make equal minimum payment towards her $217.90 total. If she falls behind, there's a seven-day grace period. If she hasn't paid by then, the layaway is canceled, the toys are returned to the shelf, and Cobbs can return for her refund, minus a $10 cancellation fee.
The schedule works for the special-ed teacher, while a piggybank or savings account wouldn't, she said. Neither would a credit card, which she's avoiding using as she tries to pay down her balances.
"With the economy it's very hard to save up money," said Cobbs.
"I'm on a budget," said Kristina Bedgood, a 43-year-old Cablevision customer service representative using layaway to buy robes and bath sheet sets as Christmas presents. "I can break up my payments." She's trying to fix her credit and pay only in cash, forgoing even debit cards after getting in trouble with overdraft fees.
For Taija Coley, a 20-year-old nursing student picking up a Monster High doll and other toys for her cousins from layaway, "it's a healthy way of shopping."
In the Philadelphia suburb of King of Prussia, the $62,012 the median household income is$27,268 higher than in New York City's Bronx borough, but the stores in and around the largest mall in America in terms of leaseable retail space draw patrons from the surrounding economically diverse towns. At the Wal-Mart, a white Mercedes zips out the parking lot exit past a rusting parked gray Oldsmobile.
Inside, the layaway counter is noticeably less active than the one in the Bronx. Several customers in the store scoffed when asked if they ever used layaway.
"It's really irrational," said John Alexander Jr., an 80-year-old retired banker. He used to marvel that his bank's customers clamored to join Christmas Clubs, which locked in customers to making regular deposits during the fall at low or zero interest rates. Essentially they gave a free loan to the bank in exchange for making sure they didn't spend their money until December.
Like layaway, Christmas Clubs became popular during the Great Depression. "It's crazy," said Alexander, but, "some people need the discipline."
"If there's a big ticket item, we put it on the credit card," said Russ R., 64, a training manager who declined to give his last name out of privacy concerns. "We just pay it off within thirty days," added his wife, Kathy, a 62-year-old former elementary school teacher.
However, that's not an option for other customers who have seen how a card's line of credit can become a rope to hang yourself with.
(Read more: Misfit toy sales may benefit deal-hunting shoppers)
Briana Abad, a 19-year-old switchboard operator and mother of an 8-month old boy, last year bought her fiancée an Xbox 360 on layaway at Wal-Mart. She only keeps one credit card, issued by her credit union, and uses it rarely. After her grandmother got divorced and her husband was slow to pay the alimony, her grandmother ran up credit card bills with medical expenses, said Abad. The whole family had to chip in to pay them off.
Abad chose layaway because, "the payments are flexible and I can put money aside," she said. Wal-Mart has a December 13th deadline for the final layaway payment but doesn't require a set payment schedule. "I don't like to give myself an excuse to spend more than I have to."
"I'm still paying off having my kid," she added, citing charges incurred during her delivery.
Dan Ariely, a behavioral economist at Duke University, says layaway can be a good system for those trying to stretching to make a purchase.
"It make the future purchase very clear... it breaks things into chunks... and it creates "loss aversion," he said. "From a design perspective it actually taps lots of good things in human nature."
"You're having someone else do the math for you," said Bruce McClary, Director of Media Relations ClearPoint Credit Counseling Solutions, a nonprofit credit counseling service. Unlike stashing the cash in a Mason jar under the porch, he said, the money you put in layaway can't get snatched.
At least not entirely.