Maximize stores' Christmas clubs

'Santa' and 'Christmas in July Sale' signs greet customers at a Toys R Us store in New York in July. The toy store chain began its holiday savings plan in June, joining other retailers that are trying to get shoppers thinking early about the upcoming

NEW YORK -- You may want to think of the winter holidays as part of the distant future. But retailers reviving Christmas savings clubs want the season at the top of your budget. Right now.

Sears Holding Co., the only major retailer with such a program when it introduced its savings club last August, launched the program a month earlier this year so more people could sign up. And Toys R Us opened its first such program in June.

Joining could be a smart move: The programs, essentially debit cards with a few special perks, can sometimes make you money, as well as help you budget.

But beware that retailers are using them to tap into shoppers' psyche, to build on the savings trend and possibly get shoppers to spend more than they planned.

Here's how holiday savings plans work, plus four tips on making make the programs work for you.

The basics

At both Sears and Toys R Us, you'll get a 3 percent bonus for any money you put on one of the cards, typically at the cash register or online, by Nov. 15 for Sears and Oct. 16 for Toys R Us. You can start saving whenever you want, or wait to the last minute, but you can't increase the balance after the deadline.

That 3 percent bonus is more than the 1 percent interest most banks are paying now, notes Chris Donnelly, a senior executive in Accenture's retail practice. After the savings deadline, the programs work like gift cards online and in stores. There are no refunds but the money on the card never expires, and the Sears card works at the company's Lands' End and Kmart stores.

Smaller retailers are joining the trend by creating old-fashioned layaway plans. But Ellen Davis, vice president of the National Retail Federation, says other major retailers are waiting to see how the programs pan out at Toys R Us and Sears before deciding whether to sign on for 2011.

The motivation

For shoppers, the cards are attractive because they offer a bonus and they bypass credit, which can cost more later, says Davis.

"Everybody loves a little extra deal," she says.

For retailers, the programs guarantee sales during the holiday season. At Toys R Us, which gets the majority of its sales during the holidays, the motivation is especially strong.

Christmas savings clubs are also good for public relations because people like to see stores grasp how they feel, Donnelly says.

"It's kind of nice to see these guys understand that people need to save more," he says.

Make it work

There are several things to think about before signing up.

First, spread out your saving so it doesn't hurt your monthly budget and you can put aside more to take full advantage of the 3 percent bonus. Note that Sears requires you sign up by Oct. 31.

Second, make sure you plan to spend the full amount you put away at that one chain, though Davis says both Toys R Us and Sears Holding have wide enough inventories to offer most shoppers anything they want.

Third, be sure you're ready to put away the money because it may mean foregoing other, more immediate expenses such as back-to-school shopping, Donnelly says.

And, finally, when it comes time to spend the gift card, remember this is in fact your savings. People often think of gift cards as "free" money and spend less carefully, even exceeding the amount on the card, Donnelly says.