Cons and pros of contracts

l A lay-by is a contract between you and a retailer where you pay for goods over a period of time rather than upfront.

l A lay-by is a contract between you and a retailer where you pay for goods over a period of time rather than upfront.

l Goods are kept at the shop while you pay for them, so no interest is added to the price.

l A hire purchase agreement is a way of paying by regular payments. The consumer takes the goods home straight away. However, interest is usually added to the price of the goods.

l In a lay-by agreement, the seller must hold the goods for you unless you do not make payments as agreed.

The price of goods held on lay-by cannot be increased if new stock comes in at a higher price.

l Ask the seller for a lay-by receipt or docket that shows your name, address and contact phone numbers; the name, address and phone number of the shop; each item you purchased, listed separately along with the price and terms of the lay-by.

l You can cancel a lay-by if you have not finished paying for it.

In this case you can let the seller know by calling at the shop, or writing a letter. You do not have to give a reason for cancelling.

l If the goods are lost or damaged while on lay-by, you can cancel the lay-by or ask the seller to compensate you for damage to the goods.

l The seller can cancel a lay- by but only if you do not keep to the agreed terms, for instance, if you do not make payments as agreed or do not pay off the lay-by on time.

l The seller must inform you the lay-by is being cancelled telephonically, in person or by sending a notification to the address you gave them.

l If you cancel a lay-by you are entitled to a cash refund of the money paid so far, but the seller may have the right to keep some of your money to cover:

l Selling costs such as the cost of storing goods, and time taken to write receipts.

The amount charged must be reasonable and include only the costs of your lay-by.

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

l In most cases, the seller cannot claim loss of value if you cancel the lay-by within one month.

l Some stores have a set amount or percentage that they will withhold if the lay- by is cancelled.

l You have the right to a cash refund.

You do not have to accept a credit note or buy other goods instead, even if shop signs or lay-by dockets say "no cash refunds on cancelled lay-by"