Laying down the lay-by law
For us consumers, buying something on lay-by is a huge win.
And because of the tough economic climate, lay-by has suddenly gone mainstream
- retailers big and small are now offering lay-bys, because they’ll lose out if
they don’t.
No credit checks are necessary because the shop gets to hold on to the goods
until they are totally paid off.
Lay-by allows consumers to choose an item - a pair of shoes, for example - and
pay them off every month, with no interest added.
Listen to Wendy on the topic, or continue reading the details under the podcast.
Importantly, the stores must refund you - they can’t issue a credit note instead,
locking you into buying with them again.
I must admit, as much as I champion consumer rights, I think the 10%
cancellation fee - which was legal before the CPA reduced it to just 1% - was
fairer to retailers.
But no-one forces a company to offer lay-bys - if they think it doesn’t make
financial sense for them, they mustn’t offer it as a payment option. It’s that
simple.
That’s what I said to the owner of Rosewood Boutique this week when a man
complained to me that when his wife tried to cancel her lay-by at the Phoenix
Plaza branch - one of five Durban branches specialising in Eastern wear - she
was told the cancellation fee was 15% AND the refund would be in the form of a
credit note, not cash.
If you find out, when you go to cancel a lay-by, that the store’s cancellation
policy is not compliant with the CPA, you can lodge a complaint with the
Consumer Goods and Services Ombud.