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Cancelling a layby
You can cancel a layby if you have not finished paying for it. Let the retailer know by calling at the shop or by writing an email, text or a letter. You don't have to give a reason for cancelling.
Can the retailer cancel the layby?
Yes, the retailer can cancel, but only if any of these situations apply:
you don't keep to the terms of the agreement (eg you don't make payments as agreed or don't pay off the layby within the agreed time)
due to no fault of the retailer, the goods are no longer available and they can’t reasonably obtain suitable, alternative goods
the retailer has ceased trading, but not because they're bankrupt, or in receivership, liquidation or voluntary administration.
The retailer must tell you that they are cancelling the layby. They must also give you a written statement (as explained above) if you request one.
Cancellation fees
There are rules about when a retailer can charge a fee and how much it can be.
When they can charge a fee
A retailer can only charge a cancellation fee when all of the following apply:
you have cancelled or not kept to the terms of the agreement
the agreement states that a cancellation fee may be charged
the retailer hasn't breached the agreement themselves.
How much they can charge
A retailer cannot charge more than ‘the reasonable costs’ they experienced during the time of the layby agreement.
Reasonable costs may include:
reasonable administration costs (eg office expenses, or salaries or wages directly related to the agreement)
the reasonable cost of storing and insuring the layby goods
loss in value of the goods (if any) during the time of the agreement (eg goods may lose value because they're no longer in season or because a new model has been released).
Getting a refund
If you (or the retailer) cancel a layby, you may be entitled to a refund of money you've paid.
The retailer can choose to refund all of the payments you've made, or calculate the exact refund you're entitled to by subtracting their cancellation fee from the total amount you paid.
Mostly, you will be entitled to a refund but sometimes you may still owe money. This is more likely to happen with goods that the retailer has ordered in especially for you. If you haven't paid enough to cover the cancellation fee, the retailer can recover the balance of the fee as a debt.
You have the right to receive your refund in cash. You don't have to accept a credit note or buy other goods instead, even if the shop’s signs or layby dockets say 'no cash refunds on cancelled laybys.' If you see a sign like this, complain to the Commerce Commssion because the retailer is breaching the Fair Trading Act. |
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