We all have eyes on the things we want and need, but sometimes costliness and unavailability of funds prevents us from clicking that ‘Checkout’ button.
But there’s a way to get everything you want, and be savvy with money at the same time.
It’s called the lay-by – simply, the regular contribution of funds toward a big ticket item until that item is paid off. And when it is, it’s yours, no questions asked, and no extra debt hanging about.
At LayUp, this is our wheelhouse – we’re the premier facilitator of lay-by options, along with a number of world-class brands, and service providers in partnership.
But how does the lay-by work? And more specifically, how does it work in South Africa?
Read on to find out more.
What does lay-by mean?
Lay-by is a payment method that allows customers to make purchases over time, usually in instalments. The customer pays for the item up front, but does not take it home until all payments have been completed.
In South Africa, lay-by agreements are regulated by the Consumer Protection Act and offer consumers greater protection with their purchases. Typically, an order is placed with the retailer and a deposit of 10-20% of the total cost is paid upfront. The customer then makes regular payments until the full amount is paid off. When the final instalment has been settled, the product will be released to them and they can take it home or have it delivered. It’s important to note that there are generally no interest or additional service fees associated with lay-by agreements.
By using a lay-by payment method, customers can spread out their payments while ensuring they get exactly what they want without running up a large credit card bill. This makes it an ideal way to budget responsibly while making larger purchases.
How should payments be made?
Lay-by agreements are a popular way of buying goods in South Africa. They allow customers to pay for their purchases over a period of time, with no interest payments or costly instalments.
The customer and the retailer agree on the total cost of the purchase, as well as how long it will take to pay off the amount due. This may vary from several weeks to several months, depending on the item or service being purchased. During this period, regular payments must be made at pre-arranged intervals from both parties until full payment is received. In South Africa, it’s important to keep track of all payments made so that proper records can be kept for tax purposes.
It’s important to note that the item being purchased is not available for use until full payment has been made. The retailer also has the right to cancel the lay-by agreement if payments are not made on time or in full.
Lay-by agreements can be a great way to purchase goods without having to pay excessive interest charges, but it’s important to be aware of the terms and conditions before entering into an agreement. This can help ensure that both parties understand their responsibilities and how long it will take for payments to be completed.
5 questions to ask on the lay-by model in South Africa
The lay-by model has become an increasingly popular way to shop in South Africa, allowing people to purchase goods and services over a period of time instead of paying the full amount upfront. This is a great option for those who may not have access to credit or other forms of financing.
But how does lay-by work in South Africa? To help answer this question, here are five key questions you should ask when considering the lay-by model:
Does the consumer immediately receive the goods after paying off?
Generally, when purchasing goods through lay-by in South Africa, you will only receive the product once all instalments have been paid and the total amount has been settled.
What happens if a consumer is unable to pay for lay-by goods?
In South Africa, suppliers are required to provide consumers with a fixed period of grace in which they may make instalments without penalty or cancellation of the agreement. This usually ranges between 10 and 30 days before any penalties apply.
What happens if a supplier is unable to provide the goods?
Any supplier offering lay-by services must ensure that they can meet their obligations under the contract, so if they are unable to procure or deliver the goods within an agreed upon timeframe, they must refund all payments made by the consumer in full.
Can interest be added to the lay-by amount?
In South Africa, interest may not be added to lay-by transactions. This means that the total cost of an item purchased through lay-by should remain the same as when it was initially agreed upon.
Is it safe to lay-by goods and services online?
While there is always some level of risk involved when making purchases online, most reputable companies have secure payment systems in place which protect consumers from fraud or theft. It is important to ensure that the website you are using has a valid security certificate before entering any financial details.
What makes the lay-by system an affordable model?
As shown, the lay-by system is infinitely affordable – it works by allowing consumers to buy goods over a set period of time while making small payments, usually weekly or bi-weekly. This type of payment plan allows consumers to pay off the purchases slowly, without having to pay any interest fees. Lay-by is especially useful for those who are unable to make large upfront payments or secure credit but still want access to goods they need. Consumers can also use lay-by as a budgeting tool which helps them save up their money on items they might not be able to afford outright at first glance.
What’s more, the lay-by system can be beneficial for both retailers and consumers alike. It allows retailers to secure sales before they are paid out while also offering consumers a more convenient way to pay for their purchases over a set period of time.
Lay-by can be a convenient way to purchase items without having to pay for them upfront or take out a loan, but it is important to understand how the process works in South Africa before deciding to use lay-by. Keep these five crucial questions in mind, and you’ll be able to leverage the lay-by to your benefit, and get those big ticket items, without incurring unnecessary debt.
Shop now with LayUp, and get the things you want, without busting the bank.