Your consumer rights in a lay-by shop are very important to ensure that retailers who offer this way of buying essential goods such as school uniforms treat you fairly and hold the goods for you until you have paid for them or you, if you have paid them back The goods are no longer available.
When you buy quietly, the supplier agrees to sell you something and let you pay in regular installments until it is paid off, and only deliver the goods when the full amount is paid.
This isn’t the same as the new fintech “buy now, pay later” method, where you get the goods up front and pay off the amount in a few installments.
You must qualify for the buy-it-pay-later deals with good credit, but low-income consumers typically don’t qualify because they don’t earn enough and often don’t have good credit.
Therefore, lay-bys are still a good option for low-income consumers who are in no hurry to have the goods they have purchased.
Lay-by offers various benefits to consumers who cannot afford to pay for items such as clothing and furniture in cash, such as people who are not South African citizens.
Your money should also be safe and guaranteed.
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Protection of consumer rights
Most people using parking bays can’t afford to lose the money they paid for, so it’s important to know what your rights are and what to expect from the retailer offering the parking bay.
Section 62 of the Consumer Protection Act (CPA) protects your rights (and your money) as a consumer when you shop at lay-by.
The store has to take care of your money while you pay and the goods you pay for.
Under section 62, any amount you pay to the retailer remains your property within the meaning of section 65 which states that the supplier cannot treat your money as its own and will treat it with the care, diligence and skill that is reasonably possible , taking care of it must be expected of someone who manages someone else’s property or money.
The shop is also liable for the goods until you have paid the full purchase price and received the goods.
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What happens if the goods are no longer available?
The CPA provides that if the retailer cannot deliver the goods after you have paid in full, the retailer must give you the choice of accepting similar or better goods.
If you do not want the substitute goods, the shop must:
- Refund you double if the reason for the unavailability of the goods was under the shop’s control.
- If the shop is not responsible for the unavailability of the goods, the shop must refund you the amount paid so far plus interest calculated from the date of your first payment. “Out of supplier’s control” in this section applies only when the store could not have prevented the availability issue.
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What happens if you want to cancel the stopovers?
If you cancel the contract before you have paid the full amount or do not make the payment within 60 days after the last payment was due, the shop can charge a maximum penalty of 1% of the total purchase price.
The business must also tell you in writing how the penalty fee was calculated, unless you state in writing that it is not required. This can also be done electronically.
After deducting the penalty fee, the supplier must refund the rest of the money you paid.
It is also important to note that if your failure to pay is due to death or hospitalization or any other cause, the store may not impose a penalty unless the store informs you of the penalty prior to signing the contract.
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What to think about when buying from lay-by
- The store must tell you when you buy at the rest stop that you will have to pay a penalty if you don’t keep up with your payments.
- The installments you have paid remain your property until the amount is settled and you accept the delivery.
- If the store cannot deliver after you have paid the full amount because it is beyond their control, the store must refund you interest or offer similar/better goods for you to accept.
- If the goods are culpably unavailable, twice the purchase price must be reimbursed.
- If you choose to cancel, the store may charge a penalty of 1% of the price, unless the cancellation is due to the death or hospitalization of the consumer.