Several clothing retailers, including Glassons and Hallensteins, are promoting a “buy now, pay later” service that lets customers take home their new threads before they’ve paid for them.
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The service is called “Laybuy” but it’s not lay-by as we know it and it doesn’t come with the same consumer protections.
Laybuy is an online payment tool, developed by Laybuy Holdings. You get your item upfront and pay for it in 6 weekly instalments. However, if you miss a payment you could be stung with default fees of up to $20. The company’s terms and conditions state it may also arrange a debt collection agency to collect amounts owed.
Using Laybuy also means if you return a faulty garment, you won’t immediately get your refund. The retailer sends the refund to Laybuy Holdings and it pays you.
Traditional lay-bys, where you pay off an item before picking it up, are covered by the Fair Trading Act. The act gives customers the right to cancel the deal at any time. That’s not the case with Laybuy.
If you’re strapped for cash, getting your new gear before paying for it may be attractive. However, you need to be confident you can make payments on time.
Despite its name, Laybuy is not a lay-by. We think the name risks misleading consumers about the service they’re getting. We’ll be raising the issue with the Commerce Commission.