North Shore Times (New Zealand)
Beware good layby’s evil twin brother
GOLDEN RULES
The funniest thing I ever saw bought on layby was a moose’s head. It was in one of those funny shops on Auckland’s Ponsonby Road filled with stuff that would look great in your house, but really you can’t afford.
The moose’s head had a sold label on it, and when I asked the shopkeeper why the buyer hadn’t lugged it home proudly to surprise his household, I was told he was still paying it off.
Just for the record, moose’s heads cost more than a thousand dollars, making them quite a luxury.
Still, better bought on layby and taking it home once it’s paid off than having stuck it on the credit card or hire purchase.
Tragically, other than for moose’s heads, laybys seem to be dying a death.
I discovered neither my local Farmers or Briscoes offers them any more.
Thank heaven The Warehouse does. ❚ Layby trumps debt
❚ They keep purchasing costs down ❚ But beware warped evil incarnations.
Two things are happening to the humble layby.
The first is that it is being steadily replaced with credit.
That’s a win for retailers who see laybys as costly to offer, and (as one retailer put it a few years back) ‘‘a pain in the arse’’.
Better to have Q Card or GEM Finance fund a purchase, and the buyer take their purchases away, and shoulder the cost of interest.
The other thing that has happened to laybys is they have been warped into something approaching evil by business people trying to find ways to make money out of lower income folk.
Laybys allow some businesses to sell people stuff at inflated prices, delivering it only when they have paid off the whole whack.
If the poor buyer wakes up to the awful deal they’ve entered and cancels, they have to pay big cancellation charges.
Layby is used by some door-todoor sales outfits that target lower-income neighbourhoods.
The old phrase ‘‘the poor man pays twice’’ fits here.
I tend to think that when it comes to buying stuff, there is a definite ranking in terms of strategies. In descending order, with the best strategy first:
Laybys allow some businesses to sell people stuff at inflated prices, delivering it only when they have paid off the whole whack.
STRATEGY ONE
Buy as little stuff as possible, and use the money for something better instead (saving, paying off a mortgage).
STRATEGY TWO
Save for the thing, and buy it using cash.
STRATEGY THREE
Layby it, while avoiding evil warped laybys.
STRATEGY FOUR
Borrow to buy a thing using a credit card, store card, hire purchase, extension of your mortgage, overdraft, personal loan, etc.
This last is the worst way as it inflates costs, and exposes the buyer to credit risk.
Not that the humble layby is without risk.
Giving money to a business to pay off a layby makes the buyer an unsecured creditor.
Should the business go bust, some in the middle of a layby could lose their money, though they have a legal right to complete paying it off, so the risk isn’t high.