A lay-by law unto themselves

My report earlier this week on Nosiphiwe Ngcungama’s unfortunate lay-by experience with a Port Shepstone clothing store came just in time for a Jo’burg resident who’d been told he couldn’t cancel his lay-by on a pair of shoes.

To recap, Ngcungama made a R1538 lay-by purchase at Clothing Junction's Port Shepstone branch at the end of November, paying an initial R538 and agreeing to pay off the remainder by the end of January.

With lay-by purchases, the goods remain in the store until payment is made in full. But the Consumer Protection Act allows the customer to cancel at any time for a refund of what they have paid, minus a cancellation fee of just 1% of the purchase price - in this case, R15.38.

But when Ngcungama wanted to cancel that lay-by two weeks ago, her request was denied.

So I contacted the company’s head office on her behalf. As a result, Ngcungama was immediately promised a refund and all Clothing Junction branches have been e-mailed regarding the correct lay-by procedures.

“I went to the store, they apologised and refunded my full amount,” she told me. I'm over the moon! Thank you so much for your help.”

Meanwhile, Emmanuel Kaphokoto was having a similar problem with the Adidas-Market store in Jo’burg CBD’s Small Street.

He paid R500 as an initial payment on a R1699 pair of shoes on November 30. But when he tried to cancel the deal - after his girlfriend surprised him with a pair of sneakers - he was told that wasn’t possible; he had to pay the full amount.

His receipt states: “No exchange on lay-bys”.

“I only got to know the law about the 1% cancellation fee when I read your column - I had given up by then,” he said this week.

When I called the store, an assistant referred me to regional manager Bernice Myburgh.

She began by saying Kaphokoto could cancel the lay-by and use the R500 he paid in November towards another pair of shoes in the store.

I then asked Myburgh if she knew what the Consumer Protection Act said about lay-by deals. Yes, she said, refusing to comment on why the company’s policy wasn’t complaint with the CPA.

Asked if she intended to see to it that the company’s lay-by policy was changed, she said she was not willing to “debate” the issue.

“Just tell him to go back to the store for his refund,” she said.

That’s what Kaphokoto did earlier this week. I told him he was due his R500 minus R16,99 (1% of R1699) as a cancellation fee.

It went better than he expected.

“It was unbelievable,” he said. “I got to the shop, and before I said anything they asked for the receipt and refunded me in full.”

But sometimes, in fairness, it’s the consumer who gets it wrong.

“Fumane” sought my help this week in getting a Centurion store to take back a jumpsuit she’d already paid for in full, via lay-by.

“I paid a deposit for it in October and settled the balance last month. But when I got home I tried on the jumpsuit, only to realise it no longer fits me properly as I have gained a bit of weight.

“I went back to the store to return it, and I was told they can't refund me; they’ll give me a credit note instead.

“But I explained to them I don't want a credit note, I want a refund and that their refusal is illegal according to the Credit Act.

“Your response will be highly appreciated.”

I explained that The National Credit Act does not apply, and nor does the Consumer Protection Act - the CPA only gives consumers the right to return goods if they are DEFECTIVE.

“If goods are not defective, as in your case, they don’t have to take them back at all, so them offering you a credit note is actually a favour.”

THE ADVICE

*The upside of a lay-by - as a form of buying something you cant afford to pay for in full, upfront - is you don’t need a good credit record, and you don’t pay any interest or other costs, but the downside is there’s no instant gratification as with swiping a credit card. You only take ownership of the goods when you have paid for them in full. So make sure you still want what you’ve put on lay-by before you made that final payment, because you can cancel any time until then, for a full refund of all payments you’ve made, minus just 1% as a cancellation penalty.

It’s a great deal for consumers, provided the retailer honours the provisions of the CPA.