Lay-bys

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What is a lay-by?

A lay-by is where you: 

  • pay for something in at least two instalments (when the agreement is called a lay-by) or at least three instalments (when the agreement is not stated to be a lay-by), and
  • do not collect your purchase until the full price has been paid.

If you pay a deposit, this counts as an instalment.

The store must give you a copy of the lay-by agreement. This must: 

  • be written in plain language, legible and clearly presented
  • state all terms and conditions, including any fees for cancelling the lay-by.

Cancelling a lay-by

You can cancel a lay-by at any time before you collect the item.

The store has to give you a refund for the payments you have already made.

They are allowed to charge you a reasonable cancellation fee, if this is outlined in the lay-by agreement.

Lay-by price has changed 

If the price of the item changes, for example, if the item is now on sale you still have to pay the price shown in the lay-by agreement, unless the store agrees to sell you the product at the new price.

You can choose to cancel the lay-by, but you may have to pay a cancellation fee – check the terms and conditions in the lay-by agreement. 

Late payment of lay-by 

If you do not pay the outstanding amount, the store may cancel the lay-by.

If this happens, they must refund any money you have already paid (minus any cancellation fee).

Cancellation fees

The store can charge you a cancellation fee (also known as a termination charge) if:

  • the store has kept their part of the lay-by agreement, and
  • you have simply changed your mind and decided you no longer want the lay-by.

The store cannot charge you a cancellation fee if:

  • the reason the lay-by was cancelled was not your fault and the store has not kept their part of the lay-by agreement. For example, the product was not delivered by the time stated in the lay-by agreement; or 
  • the store cancelled the lay-by.

Cancellation fees can only cover the store’s reasonable costs resulting from the lay-by. These costs can include any drop in the product’s price (for example, because it has been discounted). 

A cancellation fee needs to be stated clearly and legibly in the lay-by agreement.

Last updated: 10/05/2012

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