Retailers are finding more ways to offer their customers financial products — mortgages, loans and the like. In the past, people looked to banks for this kind of product. But big-box stores are trying to find new ways of getting money to those who cannot use banks, or want to avoid them altogether.

Costco may be best known for pallets of bottled water or bulk toilet paper that can last a family an entire year. But earlier this year, it also added mortgages to its growing array of financial offerings.

Costco is not actually making the loans. Rather, it refers customers to its partner banks, with whom it has negotiated discounts on closing costs and interest rates.

Jay Smith, the director of business and financial services for Costco, says offering mortgages helps boost Costco's No. 1 profit center: annual membership fees.

"This is a great way to increase that value for membership," he says, "and that's why we're offering" loans.

Costco, which also offers auto and home insurance, is just one of the latest entrants in the alternative consumer finance market, an area some refer to as "shadow banking."

For some retailers, like Home Depot, branded credit cards and loan offerings are old hat. The home improvement chain established its credit and loan offerings almost at its inception. That's because it sells lots of big-ticket items, especially after disasters like Hurricane Sandy, when there is sudden demand for new credit.

Home Depot's vice president of financial services, Dwaine Kimmet, says the company recently sweetened its offers in part because other sources of credit have dried up.

"And customers just can't get access to capital, because there's just not equity in their homes, in many cases," he says.

Offering credit in a store also helps sales, of course. Wal-Mart, the world's largest retailer, partners with other companies to offer checking accounts, check-cashing, money orders and a host of other services.

Alternative financial products appeal to a growing number of people, says Wal-Mart Vice President Daniel Eckert.

"I think there's also a group of the population that engages in these services, frankly because their needs are not being met by 'mainstream financial services,' and are unhappy about the value proposition or the costs," he says, adding that those customers "have found that this is a better way for them to manage and control their finances, and is more accessible to them."

In fact, in a recent report, the Federal Deposit Insurance Corp., which regulates banks, said a growing number of Americans are going outside the mainstream banking system to manage their money. More than 8 percent of U.S. households avoid traditional banks altogether.

Norma Garcia, a senior attorney for Consumers Union, says the fact that retailers see an opportunity in financial service products is a sign of the times.

"And it really should be a wake-up call for the banks that they are losing customers," she says. "And that they need to be more responsive to the needs of consumers."

Garcia notes the backlash against banks over increased overdraft fees and other charges. She says that although mortgages offered through Costco and checking accounts through Wal-Mart may offer some lower initial fees, Consumers Union is still studying the products to see whether they also come with notable drawbacks.

"What we have seen is that the protections vary considerably," she says. "It's not always apparent to the consumers what the risks might be with that product. In some cases there are activation fees, [or] there are dormancy fees if you don't use the product for a certain period of time."

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