Walmart has discontinued its layaway service. Joe Raedle/Getty Images
Walmart ended its layaway program prior to the 2021 holiday season.
Affirm advised that shoppers should use the "buy-now-pay later" service.
Customers are furious and may end up spending more on holiday shopping.
Check out more stories from Insider's business page.
Walmart customers are furious at the retailer's decision to discontinue its layaway program prior to the 2021 holiday season and replace it by a "buy now-pay later" service.
Layaway was a way for shoppers to pay over time for gifts without paying extra fees. The buyer would pay a small deposit in order to reserve the item and then take it home after they have paid all of their dues.
Walmart stated that shoppers should use its buy-now/pay-later service which it offers through Affirm, a partnership dating back to 2019, instead.
Affirm has no hidden fees or late fees. However, some customers may end up paying 10% or more interest over the course of a calendar year depending on their credit score, according to Walmart. Some customers may not be eligible due to a lack or approval of credit, or because their bank isn’t connected with Affirm.
One Twitter user said this week, "Congratulations on killing Christmas for SO many families who were DEPENDING upon Layaway for Christmas and who do not qualify to Affirm."
"Just heard that Walmart has discontinued their layaway program and replaced it with Affirm. It's going to ruin the holidays of many families, that's what it is," another added.
Twitter users made many similar comments.
Walmart did not respond to Insider's request for comment.
Insider was told earlier in the week by a spokesperson: "We are confident our payment options offer the right solutions to our customers.
They said, "We have learned a lot over the past year as customers' shopping habits and needs have changed."
Walmart sees the benefits of ending layaway, Neil Saunders (Managing Director of GlobalData Retail) stated in an email to Insider.
Continue the story
He explained that Walmart can sell the goods instantly, doesn't need to store them and transfers some of the financial risk from Affirm.
He said that shoppers are more affected by the changes.
He said that some people will be happy to have products delivered immediately by Affirm. This gives them more flexibility, and allows them to shop later in the season since they don't have to make payments in advance.
He said that others might not be eligible for Affirm, and some may have interest to cover the advance, which ultimately means they will spend more on holidays.
Critics claim that shoppers are more at risk if they buy-now-pay later services. Saunders stated that customers only pay for products once they receive them. This can lead to shoppers having financial problems because it is tempting to spend more than what you have, and accumulate debt.
Business Insider has the original article.
