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Lay bys

A lay-by is a convenient and inexpensive way of buying goods offered by many stores. In a lay-by you select the items you wish to buy and enter an agreement with the store. You may pay an initial deposit and the remainder of the item's cost in regular instalments. In exchange the store will hold the item for you until you have completely paid for it. There are no credit charges involved but there may be a termination fee charged if you decide to cancel the lay-by.

When you enter into a lay-by agreement you should get a copy of the agreement, which must:

  • be in writing
  • specify the terms and conditions of the lay-by, including any termination fee that may apply
  • be in plain language, legible and clearly presented.

A termination fee is an amount of money that the store can ask you to pay if you cancel the lay-by before the agreement has finished. All other money you have paid must be refunded.

The store cannot charge a termination fee if:

  • it was not clearly specified in the lay-by agreement
  • you cancelled because of something that was the store's fault (for example, your goods were damaged while in storage)
  • the store cancelled the lay-by agreement.


Copyright © 2011 Money Stuff

An initiative from NSW Fair Trading


Last Updated: 26 November 2012

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This information must not be relied upon as legal advice. For more information about this topic, refer to the appropriate legislation.

© State of New South Wales through NSW Fair Trading
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