CHICAGO (Reuters) - Sears Holdings Corp , which expanded its layaway program to help cash-strapped consumers pay for purchases during the recession, is now helping its customers exchange their jewelry for cash as gold prices soar.

The new service, available at the jewelry departments of Sears and Kmart stores, allows customers to send their gold and silver items to Pro Gold Network, a company that buys precious metals from consumers.

Pro Gold makes an offer on the gold or silver and the consumer can choose to accept the offer or have the items returned, free of charge, Sears said.

Sears provides the shipping envelop and also helps consumers track the items via websites or a toll-free customer service number.

Sears has seen sales pressured over the past two years by the weak economy and has also lost sales to discounters like Wal-Mart Stores Inc and electronics retailers like Best Buy Co Inc . The company did say, however, that sales improved in the first quarter.

In 2008, it expanded its layaway program as a way to help cash-strapped consumers pay for goods.

Advertising from companies offering gold recycling services had reached a fever pitch in late 2008 due to a global economic crisis, as the price of gold climbed above $1,000 an ounce in a flight to safety.

Last week, gold has soared to record highs at just below $1,250 an ounce as jittery investors fretted over sovereign risks and inflation.

Bullion is still far away from its inflation-adjusted record at over $2,200, analysts said. In 2001, gold was trading at just $250 an ounce.

(Reporting by Brad Dorfman and Frank Tang, editing by Dave Zimmerman)