Ins and outs of layby deals

Christmas is on the horizon and so too may be the time for making your last few payments on your Christmas hampers or layby gifts.

But what if you want to cancel a layby?

Layby is a popular way to buy goods when you can’t afford to pay for them immediately.

The store holds your goods while you pay for them in instalments during an agreed period.

You can take the goods home when you make the last payment. A seller may call the sale by another name, such as partpayment, but it’s still a layby sale.

Layby sales are covered by the Layby Sales Act 1971.

Many of the Christmas hamper offers – in which you pay instalments throughout the year and the hamper is delivered near to Christmas after final payment – are covered under the same rules as layby sales.

You can cancel a layby at any stage while paying it off, and don’t have to give a reason.

Let the seller know by calling at the shop or by writing.

If you cancel a layby, you are entitled to a refund of the money you have already paid.

However, the seller may have the right to keep some of your money to cover selling costs and/ or loss of value.

The selling cost is the cost to the seller of having the goods on layby for you. The amount charged must include only the actual costs of your layby.

Some stores charge a set amount if a layby is cancelled.

They may call this an administration fee or selling costs.

The store should tell you about this charge when you agree the terms of the layby.

Loss of value is any loss in retail value, for example because the goods are no longer in season or a newer model is available.

In most cases, the seller can’t claim loss of value if you cancel within one month of beginning a layby.

You have the right to receive your refund in cash. You do not have to accept a credit note or buy other goods instead, even if the shop’s signs or layby dockets say no cash refunds on cancelled laybys.

If the selling costs and loss in value are more than the amount of the deposit, the seller can keep the deposit, but cannot ask you for any more money.

If you ask, the seller must give you a free, written statement within seven days of cancelling. This statement should tell you any loss in value, the selling costs and the amount of your refund.

If you and the seller can’t agree about your refund ( or about other aspects of your layby), you can go to the Disputes Tribunal (justice.govt.nz/ tribunals/disputes-tribunal).

The tribunal is an informal and relatively inexpensive way to sort out complaints made under the Layby Sales Act.

You don’t need a lawyer to take your claim to the Tribunal.