Sears to let jobless stop payments, still keep fridge

Sears Holdings Corp., the largest U.S. department-store chain, will let customers who lose their jobs suspend payments and keep appliances bought with store credit cards in an effort to bolster sales in the recession.

Customers who spend at least $399 on appliances and related merchandise between July 6 and Aug. 1 will have one-twelfth of the purchase price credited to their account for every month they are out of work, said Larry Costello, a company spokesman. Those who are jobless for more than a year will have the full debt forgiven, he said. The offer period may be extended, he said.

"We thought this would be a way to get folks to jump in where they'd been a little reluctant," Doug Moore, president of Sears's home-appliance unit, said in a telephone interview.

The retailer, based in Hoffman Estates, is running the trial program to spur spending on refrigerators and washing machines as consumers hold off on bigger purchases amid declining home values and mounting job losses.

Customers who lose their jobs between 60 days and one year after having made the purchase qualify for the offer, Costello said. The program also covers delivery, service and installation costs, he said.

Sears advanced 95 cents, or 1.5 percent, to $65.85 at 9:53 a.m. New York time in Nasdaq Stock Market trading. The stock gained 67 percent this year before today.

Same-Store Sales

Last month, Sears said a drop in purchases of appliances and other home goods in the three months ended May 2 drove an 11.7 percent decline in sales at stores open at least a year. Sears didn't specify appliance sales.

Sears, the largest appliance seller in the U.S., gained market share for the past four quarters after seven consecutive years of declines, Moore said.

Best Buy Co., the world's largest electronics retailer, said June 16 that appliance sales at stores open at least 14 months fell 20.1 percent, compared with a 4.9 percent overall same-store sales drop in the three months through May 30. The chain is based in Richfield, Minnesota.

Same-store sales are considered a key measure of retail performance.

"It's a differentiated program, and we believe that that's going to get people to choose us over the other guys," Kevin Brown, Sears's chief marketing officer for home appliances, said by telephone.

The debt-forgiveness trial follows offers by carmakers allowing buyers who lost their jobs to stop payments. In January, Hyundai Motor Co. began offering the option of returning vehicles and abdicating some loan payments without penalty. General Motors Corp. and Ford Motor Co. subsequently introduced similar programs.

"It is much different than the Hyundai-GM-Ford models that we've all seen out there, in that you keep the appliance," Brown said. "We're the only ones with a program of this kind in this industry."

Citigroup Inc.'s credit-card unit is managing the program. Sears will run a Web site, www.searsbuyerprotection.com, with details.