Layby and buy now, pay later schemes don't make products cheaper. You pay the same price, just spread out over time.
Before you buy on layby
Layby is a popular way to buy goods when you can’t afford to pay for them straight away.
A layby sale is when:
- you pay for something in instalments
- the retailer keeps the item until you’ve paid for it (or an agreed part of it)
- the item costs less than $15,000.
Any sale that matches this description or type of sale is a layby sale, even if the seller calls it by another name, eg part-payment.
You can't be charged interest if you buy something on layby.
Your rights when you buy on layby
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
- 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
- a free statement of your account at any time
- cancel the sale at any time before the final payment and get a refund — minus a reasonable cancellation fee.
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 to pay.
You can also ask for a free statement of your layby account at any time, which the retailer must provide within five working days. The statement must include:
- the purchase price
- total amount paid so far
- the balance owing and when this should be paid
- any cancellation fees.
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.
Contracts and sales agreements
Cancelling a layby
You can cancel for any reason before the last payment. Tell the retailer. After cancelling, the retailer must immediately give you a full cash refund of the amount paid already. They can charge a reasonable cancellation fee. Retailers can recover the cancellation fee as a debt if you don't pay it.
Your right to a refund is protected by the Fair Trading Act. The retailer can't ask you to accept a credit note instead.