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The pros and cons of lay-by purchases - #ConsumerTalk

24 February 2021 3:26 PM

Lay-by allows you to choose an item and then pay it off every month, interest-free, explains consumer journalist Wendy Knowler.

It appears that the Covid-19 pandemic is changing the way we shop.

For many, whose incomes have been affected, either through salary cuts or retrenchment, lay-by purchases - where you can buy an item and pay it off every month, interest-free - have proved an attractive option.

Consumer journalist Wendy Knowler says there's definitely been an increase in this type of purchase in the last year.

Thanks, no doubt, to the tough economic climate, lay-by has gone mainstream - retailers big and small are now offering lay-bys, quite simply because they’ll lose out if they don't.

Wendy Knowler, Consumer journalist

Knowler says on the whole lay-by purchases are a very consumer-friendly way of shopping.

Too many people don’t have access to credit because of impaired credit records, commonly referred to as being “blacklisted”. So with a lay-by, no credit checks are necessary because the shop gets to hold on to the goods until they are totally paid off.

Wendy Knowler, Consumer journalist

So how exactly does lay-by work?

Well, it allows you to choose an item - a pair of shoes, for example - and pay it off every month, with no interest added. The store keeps the until the final payment is made.

Lay-by can work for you if you use it to buy things you don’t need immediately - you can lay-by the warm winter boots or jacket in April or May before the temperatures plummet.

Wendy Knowler, Consumer journalist

But what happens if you change your mind, and no longer want the item?

Knowler explains that the law is larger in favour of the consumer.

According to the Consumer Protection Act, you can cancel a lay-by at any time, and must be refunded all payments you’ve made up to that point, minus just 1% of the retail price as a cancellation penalty.

Wendy Knowler, Consumer journalist

Importantly - the stores must refund - they can’t issue a credit note instead, forcing you into buying with them again, as many do.

Wendy Knowler, Consumer journalist

RELATED: PEP's Lay-by Buddy scheme provides the chance to give a little and help a LOT

Knowler says it's important to check out a company’s lay-by conditions before signing on the dotted line, since getting justice from those retailers who knowingly don’t comply with lay-by law is very difficult.

RELATED: PayJustNow disrupts lay-by system: Make your first payment and take it home!

Listen to the full Consumer Talk conversation with Wendy Knowler by clicking below:




24 February 2021 3:26 PM

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