NEW YORK (FORTUNE) - With retail sales proving more sluggish than expected -- and concerns that home heating bills will crimp sales even further -- many retailers are finding the need to be more creative this holiday season.

One approach that's proving popular is offers of zero percent financing for 12 or 24 months when shoppers buy big-ticket items like plasma televisions and washing machines. Even though such deals can lead to write offs -- the customers drawn to them often have less discretionary income and are more likely to default -- retailers like Sears and Circuit City feel they can live with the delinquencies, because they're not as margin-killing as having to mark down merchandise by 50 percent closer to Christmas.

And recent figures suggest that deep discounts alone aren't enough to keep the cash registers ringing: The Commerce Department reported earlier this week that November retail sales grew 0.3 percent, below estimates forecasting 0.4 percent growth. Excluding autos, retail sales actually shrank 0.3 percent, the biggest drop since April 2004.

It's impossible to track how many zero-percent offers exist, but retail sources say that they're on the rise. "I'm surprised that [retailers] feel OK about their no-interest offers, and many expect to repeat them this year," says Bain & Co. retail guru Darrell Rigby.

Why? For starters, the deals are enticing. Free money is hard to turn down, no matter your income bracket. "For lower-income folks who would have financed [the purchase] anyway, it's saving them money," says Scott Hoyt, director of consumer economics at Moody's Economy.com. "And for higher-income folks, why not?"

But dig a bit deeper, and you get to the real reason. Over the past five years, retailers -- most notably Sears -- have sold off their proprietary credit card operations to financial giants like Citigroup, GE Consumer Finance and HSBC. In 1999, 55 percent of store credit card balances were held in accounts operated in-house by retailers, according to The Nilson Report, a newsletter that tracks the payment card industry. By 2004, that figure had plummeted to 15 percent.

Big banks not only have deeper pockets than retailers, but they are able to borrow money at cheaper rates. A retailer whose store cards are brought to you by a bank is able to get more creative with its promotions. Thus, we see more "0% interest for 12 months" type of deals.

Indeed, last month Merrill Lynch analyst Danielle Fox reported that both Best Buy and Circuit City were extending the length of the credit offer from 12 to 24 months on items like televisions, digital cameras and laptops.

It gets better. The banks, thanks to their experience with balance transfer offers and teaser rates, have a pretty good idea of how many shoppers will take them up on such an offer and then fail to pay off the balance in the allotted time. At that point, the poor sap is nailed with an exorbitant interest rate that can range from 18 percent to 24 percent. Such a customer "becomes very profitable very quickly," says David Robertson, publisher of The Nilson Report.

And there are more of those shoppers crowding the aisles today; according to the American Bankers Association, credit card delinquencies hit an all-time high of 4.8 percent of all accounts in the second quarter of 2005.

Delinquency rates for these retail-driven finance offers can be even higher, says Hoyt. "There is more of a risk this season that people will be less able to make payments on these offers," says Frank Badillo, senior economist at consultancy Retail Forward.

So while we won't know how most retailers fared until the dust settles next week, these zero-percent offers will warm the hearts of many a banker this winter.