Will Sears Strike Gold With Lease-to-Own Program?

Sears found success with its layaway plan. Now it's come up with another option to help cash constrained consumers buy big ticket items such as electronics, furniture, home appliances and mattresses — a lease-to-own program.

The program, which was tested in 10 stores in Florida, New York and Texas last September, is being rolled out to all of Sears' 900 stores this week. Sears is partnering with WhyNotLeaseIt, a lease-to-own company that also works with Ashley Furniture, Discount Mattress and Jennifer Convertibles.
"Over the last three to four years, it has become difficult for our customers to have access to credit and to get new credit," Jai Holtz, vice president of financial services at Sears, told The Associated Press. "The program gives a much-needed financial solution to those unable to purchase on credit, secure credit, or because of immediate need, can't use layaway."
Consumers participating in the program will not have to undergo a credit check. They will, however, need to be at least 18, earn a minimum of $1,000 a month and have a Social Security or tax identification to apply. Items $280 and up will qualify for the program.
Similar programs to the one being offered by Sears have come under criticism in recent years for charging rental fees well in excess of the value of the products being purchased. Companies operating within the space say fees account for services such as delivery, opt-out clauses and pick-up in addition the actual cost of the item.