What you need to know before you buy gift vouchers or products on layby, and what your rights are once you have bought them.

Gift vouchers

A gift voucher is an electronic or paper contract that can be exchanged for products or services up to the value of the voucher.

You can’t get change when you use a gift voucher unless the voucher’s terms specifically state that you can. If you lose a gift voucher, the shop doesn't have to replace it.

Gift vouchers are popular on group discount and daily-deal websites where you are emailed the voucher to redeem for hotels, restaurants, leisure activities, beauty treatments, electronics and much more. Rules on the use of these vouchers vary according to the group discount website and the business that is selling the deal, so read their terms and conditions of use carefully before you buy.

Read Shopping online to find out more.

To minimise your risk:

  • buy vouchers that can be used at more than one franchise or shop
  • read about how to redeem your voucher, the expiry date, and any other terms and conditions
  • pay by credit card so you can apply for a credit card chargeback from your credit card company if you need to (a chargeback reverses the transaction)
  • use any vouchers as quickly as possible
  • keep a record of all your purchases.

Layby sales

Under the Fair Trading Act, special rights protect you when you buy on layby if:

  • the products are worth no more than $15,000
  • you pay for the products in three or more payments over an agreed timeframe (or two if you both agree)
  • the shop holds your products while you pay for them
  • you can only take the products home on the last payment (or earlier if the store agrees).

Layby is cheaper than buying on credit because no interest is added to the cash price. You also have the right to cancel at any time. Layby sales don’t include services or sales agreements that include interest or fees (credit contracts), other than for cancellation.

Read Loans and credit to find out more.

If you bought products on layby before 17 June 2014, your layby sale is covered by the Layby Sales Act(external link), and your rights and the laws about your sale are different.

Gift vouchers

The terms and conditions for using a gift voucher are usually printed on the voucher. A voucher is like cash, so if you lose it, it’s gone. But if the voucher had been made out specifically to you and is not transferable, the store might replace the voucher. Check the terms of the voucher, or ask the store.

You should check the expiry date carefully and any other terms and conditions on the voucher.

If you don’t spend the full amount on an electronic card, you can redeem the balance on another date. If it is a paper voucher, the store may give you another voucher if the remainder is more than $5, or change if it is less than $5. However, the store doesn’t have to give change unless the terms of the voucher say that they will give change. Check the information on the voucher, or ask at the store.

If you don’t want a voucher that is given to you, the store doesn’t have to refund money for that voucher. Also, if a voucher has expired, the business doesn’t have to accept the voucher, but they may if it is only a few days out.

Layby sales

If you buy on layby, the Fair Trading Act (FTA) provides you with certain protections and rules that traders must follow. These include the rights to:

  • a set price and to have the products kept safely until fully paid off, unless you don’t make payments
  • a written copy of the layby contract before you buy and a free statement at any time
  • cancel the sale at any time before the final payment and get a refund when you cancel.

If a retailer sells your items or fails to set them aside on layby, you can ask for a replacement or a full refund at that price, even if new stock comes in at a higher price or is on sale at a lower price.

The layby contract must be dated, legible and easy to understand. The front page must:
describe the products

  • summarise your right to cancel and show any cancellation fee
  • include the retailer’s contact details
  • state the total price you have to pay.

You can also ask for a free statement of your layby sale account at any time, which the retailer must provide within five working days. The statement must include:

  • the purchase price
  • any payments already made
  • the balance owing and when this should be paid
  • any cancellation fees (if applicable).

If the retailer doesn’t give you your contract or a free statement on request, you can cancel and they cannot charge you a cancellation fee.

You can cancel a layby for any reason before the last payment. Let the retailer know. After cancelling, the retailer must immediately give you a full refund in cash or refund the amount you have paid so far, less a reasonable cancellation fee, if this applies. Retailers can recover the cancellation fee as a debt.

Retailer has gone out of business

Gift vouchers

When a retailer has gone out of business, the business is no longer run by its owners. If the business is sold, the new owners probably won’t be responsible for the previous owner’s liabilities. Usually it will be very difficult to get your gift voucher honoured. You can still take the voucher in to see if they will honour the voucher based on goodwill.

Layby sales

For layby sales, if you haven’t missed a payment in three months, you can pay the balance and get your items as long as they are still available. If they are not, you still have priority over other unsecured creditors to get your money back, but you will have to register your claim with the receiver.

See also:

Retailer tries to get out of contract

Trying to opt out of the FTA by contracting out is illegal. Look out for a statement or sign saying ‘No cash refunds on layby sales’, or offering a credit note instead of a refund. These statements may breach the FTA by misleading you about your rights.

Contact the retailer first

First, you need to go back to the retailer and try to negotiate a solution to any problems you have with your layby or voucher. You can cancel your layby for any reason before the last payment and get a refund less any reasonable fee for cancellation.

Retailer gone out of business

When a retailer has gone out of business, the person with the voucher becomes an unsecured creditor. Usually there aren’t any funds left to get your money back. Keep the voucher and contact the receivers to make a claim. If the person who paid for the voucher paid by credit card, they should apply to the bank for a chargeback to get a refund as soon as they hear the business has gone bust.

As long as you have made a payment within the last three months, you can pay the balance owing and take the products away if still available. But you may not get your layby products or all the money you have paid back. Register your claim with the liquidator or receiver.

If you haven’t made any payments within the last three months on your layby, then you don’t have any of the above rights and you will have to join the queue with all the other unsecured creditors.

Read Resolve a problem to find out more.

Next steps

If you are unable to resolve your issue directly with the retailer, manufacturer or service provider, our Resolve It tool has information to help you take the next steps. These may include going to the Disputes Tribunal or District Court.

Resolve it: Faulty products and services

Need more help?

Contact us for more guidance.

Common situations

Reasonable cancellation costs

Max buys an entertainment system on layby for $10,000. He tells his wife when he gets home and she is horrified! She threatens divorce unless he cancels the sale. Max cancels the next morning and the retailer charges him a $100 cancellation fee. Max offers to pay $20 in administration costs, which he thinks is reasonable for the ten minutes of staff time he used setting up the layby. If the retailer disagrees, he would need to justify that the costs are reasonable.

Unused gift vouchers

Brad buys a health and beauty voucher from a daily-deal website and gives it to his girlfriend Sue for Christmas. It expires three months from the date of purchase. Sue does not check this date, and after four months she decides to redeem the voucher. When she phones to make an appointment she is told the voucher has expired. She checks the date and finds it is too late to use it.