Layby For Your Next Purchase – Is It Right For You?

If you have ever found an item at a store and fallen in love but not had all the funds to purchase it on the spot, you may have encountered layby. While not every store will offer layby; it may be a service that can be extremely useful to some shoppers. So, what does layby mean? Let’s look into the concept alongside other methods of shopping, both online and in-store.

What is a layby?

A layby is a method of paying a small portion of the sale price so that a store will hold the product you are chasing until you can fully cover the cost. This isn’t a service offered at all stores, and the product may have to be over a certain amount before the privilege becomes available. However, it can be pretty helpful if you are between paychecks or want to get started on your Christmas shopping a few months in advance.

Remember not to assume all stores offer the same layby terms and conditions. The terms and minimum costs will vary across locations. However, if you foresee potential money issues and believe you may need to spread out your payments on purchases, consider looking into how a layby might help you.

How does layby work?

There are a few meanings to the word layby; for example, the British layby is a stopping bay beside the road. When discussing the shopping system of layby, however, many countries offer their take on the service. So, how does layby work in Australia?

Dependent on the store you are shopping in, layby is generally paying a deposit to secure a product for later purchase. In most cases, this product may need to have a value of more than $40, and your repayment term maybe four to eight weeks. You will potentially have to put down a deposit of 10% of the purchase price. Typically, big chain stores such as Big W, Target, and Kmart offer some form of a layby. However, if you aren’t sure, get in touch with the individual store.

What is layby payment?

Layby repayments happen in instalments, similar to buy now pay later. However, the main difference between is that a layby will hold your goods until you have completed the full payment. If you miss a repayment, you may receive a letter from the store, reminding you of your obligation.

In certain circumstances, the store may extend your layby term by two weeks out of courtesy. This is not something that you should feel you are entitled to, however. Aim to be prompt with your payments. You may be able to negotiate with the retail to adjust the repayment amount. Again, this is not something that you should feel entitled to and may only happen between smaller retailers.

What stores offer online layby?

Certain retailers may permit online layby; this is not common. Typically, you must establish the agreement in-store. This is so the contract can begin and you can place your deposit. You also may not be able to set up or pay for your layby over the phone. These transactions typically occur face to face.

Some chain stores, such as Big W, may allow you to make your payments across several different store locations. However, your last payment will have to be made in the initial store so that you can collect your goods. When you begin the process, you will typically have to provide photo identification and other information. This photo ID will also be necessary if you go in to change contact details, finalise or cancel your layby.

Stores may not permit layby on products that are on clearance or that have been discontinued. Certain stores may also not allow a layby on products such as vouchers and prepaid cards, perishable items, chemical products or specific garden and plant products. If you are unsure what you can and cannot put on layby, get in contact with a staff member.

What if you no longer want to go ahead with a layby?

There are several reasons you may decide to cancel your layby. Luckily, most retailers will allow you to cancel the contract at any time within the repayment period. If this happens, you will receive a full refund, minus the value of any potential termination fees.

If you fail to make your repayments when they are due or do not come forward to collect your goods by the due date, the store will consider this termination. In this instance, the store will refund you, and they will put the items back into circulation. When you establish a layby, you may pay a small service fee. You will most likely not receive this cost back if your payment terminates.

How to layby flights?

A layby is typically not the term used for flights, but there are specific deals travel agencies may offer that allows you to put down a deposit and slowly make your payments. Generally, flights themselves are not a part of this process. However, if you were to purchase a holiday package, you may pay for the flights as part of the deposit. From there, the rest of your instalments would be to cover accommodation costs or activities.

The cost of living has increased, meaning it is getting more expensive to travel. Paying travel costs in instalments is one way to still travel without worrying about blowing your monthly budget. Speak with various travel agents to see what is available to you and what payment methods are on offer. Book now pay later might change how you holiday.

What is a layby sale?

A layby sale, unfortunately, is not a sale on items to be put on layby. Instead, it refers to a sale made through layby. The Australian government defines a layby sale as a transaction with payments split over a minimum of three instalments. The shop then hands the goods over to the consumer once the total price has been paid.

These days, shops do not make as many layby sales as in the past. While it is still a service you can utilise, buy-now-pay-later schemes are much more popular currently. This allows you to obtain the goods immediately and make repayments after. Meaning that the store does not have to hold onto your goods throughout the repayment period.

Remember that if you wish to terminate your agreement, the store may charge a termination fee. If you already paid enough to cover the cancellation cost, the store will take this from your refund. If you are not that far into your repayments, the store may take this sum out of pocket.

How to know if a store does layby?

Most of the big chains will have a section on their site to discuss the terms and conditions of such a transaction. Start on their website first to see if you can find the answer to their questions. Or, if you are in store and wondering if you can create a layby contract, simply raise your queries with the help desk, and they should be able to organise aid for you.

If you are looking to discuss a layby with a smaller store, you may have to contact them directly. While these stores may not advertise a layby opportunity, you may be able to negotiate for one. Please note that you are not entitled to this payment method, and if a store does not wish to grant you one, you should respect their decision.

What is a layby agreement?

A layby agreement is a name for the contract between you and the store you wish to interact with. This agreement can have a term of one week or multiple months. Your arrangement will have to be in writing and should list the following information:

  • The item on sale and its details
  • How much it costs on the date of purchase
  • The size of the deposit you will put down on the purchase.
  • The maximum length of the term.
  • Details of any refunds and cancellation policies that the store may have.

If a termination fee was not initially a part of the agreement, the store cannot charge it later. If the business closes down or the store cannot provide the item to you for reasons out of their control, you should be entitled to a full refund. Should the business attempt to cheat you out of your money or goods, consider making a complaint to the Australian Competition and Consumer Commission (ACCC).

Does layby accept credit?

Yes, you may pay a layby purchase via whatever method the checkout allows. If you are shopping through a store such as Big W, you will have multiple options for making your payments. Keep in mind that you cannot pay online or over the phone. So, while you can pay your instalments in credit, you will have to do so in-store.

The key use of layby, however, is the avoid having to pay in total upfront. This happens when people want to pay in cash but do not have that kind of money available. If you wish to pay for the item entirely on credit, you may be able to skip layby altogether and apply for a fast cash loan instead. Through Monzi, you can apply from $300 to $10,000 now. Just keep in mind that lenders charge interest on any money you borrow.

Layby vs LayBuy

When researching, you may come across the company LayBuy. LayBuy is the same as the layby a store would offer you; however, like Afterpay, LayBuy is a third party that you can make purchases through. These purchases are then repaid in a series of instalments – usually six. Unlike a genuine layby purchase, however, LayBuy is simply a buy-now-pay-later (BNPL) service that allows you to take the goods upfront and then repay it later.

Traditional layby setups can be helpful to shoppers who would prefer to avoid the temptation of overspending. After all, if you can defer payments to the future, you may find that you exceed your budget. In addition to this, if you are worried about your reliability or ability to make repayments, layby may be a more manageable option than BNPL.

How does PayPal layby work?

When you make your payments, you can make them without whatever method of payment the store permits. This means that you may potentially be able to cover an instalment with cash, credit, or cheque. As you can pay with credit, if you operate through PayPal, this may be an option.

In terms of LayBuy, PayPal is partnered with this company, meaning you can also operate through them for your BNPL. Monzi cannot speak on the operations of every BNPL company. You will have to do your research on this if it is a payment option that entices you. In this instance, we mention LayBuy to remove confusion between it and the traditional layby method. Different payment methods suit different people, and it would be practical to consider your options from an individual standpoint.

Typical terms and conditions

There are not a lot of terms and conditions for layby. The concept is rather simplistic to grasp; however, if you are unsure about the laws, the ACCC outlines them thoroughly. The business’s requirements for an agreement are that it is in writing. The agreement must explain all terms and conditions in a transparent manner. Meaning they cannot use legal jargon to trick the unsuspecting consumer. The store must provide a copy of this agreement to the consumer.

Cancellation of this agreement can occur any time the customer decides before the collection of the goods. However, if either party cancels the contract due to the business’s actions, the store cannot charge the termination fee. Examples of this include when your goods are damaged in the store’s warehouse. This is the business’s fault, and if you cancel the agreement, you will get a complete refund.

Gift purchased with a brown bow purchased on layby

Advantages and disadvantages of a layby

As with most financial transactions, there are both advantages and disadvantages to shopping via layby. Some of these pros and cons are:


  • Simplify the busy periods: When it comes to the festive times of the year, Christmas particularly, you will have a lot of stress on your shoulders to sort presents. You may be able to remedy this by doing your shopping a couple of months in advance and paying by layby. This means you will be able to obtain all your desired goods, and it won’t hurt your bank account in one hit.
  • May be helpful for budgeting: Paying for an item in instalments means that if you need to buy something expensive, such as a couch, you can budget your payments. A layby works best for things that are wants, not needs. So, if you want to upgrade an item in your house and can’t afford to put it off for a couple of months, it is excellent for avoiding a dent in your bank account.


  • Item remains at the original price: Whatever the price was on the day of the agreement is the price it will stay at. Therefore, if the product gets reduced during your layby period, the item you have agreed to pay for will not decrease.
  • Service fees: Chain retailers may charge you service fees to enter the agreement. This fee may range between two and twelve dollars as a blanket estimate. Smaller retailers may not require a service fee.
  • Cancellation fees: while you can easily opt to cancel your agreement at any time, if you do, the retailer may keep your deposit and service fee. This means the store may refund whatever you have already paid, minus this small sum.

What about buy now pay later?

Layby and BNPL work very similarly, except in the reverse of each other. With layby, upon completion of your payments, you are free to collect your items. Whereas with BNPL’s you can collect your goods upfront and then begin your weekly instalments.

A layby is an agreement established between you and the store you are purchasing the item from. BNPL, however, is an agreement between you and the service provider, as they will pay the store on your behalf. BNPL is a riskier practice. This is because you can easily over-commit to these services. As you don’t have to pay any cash up front, it is easy to make several large purchases simultaneously without realising how much you have actually spent.

Generally, BNPL services won’t conduct a credit checks when you sign up, however, missed payments can go to your credit report. This means you should consider whether utilising this service may have repercussions further down the track. With a layby, if you cannot make a repayment you simply get your money back and the contract concludes. However, if you miss a repayment or do not pay to full amount with BNPL, you may incur extra fees.

Can you refund your layby purchase?

Once you have completely paid off and collected your purchase, whether you can still get a refund is dependent on the store. In some cases, you may not be eligible for a refund as you had the whole layby term to change your mind. However, if your item was faulty or not the quality you expected, you may be able to return it to the store and refund the purchase.

If you decide you do not want to continue before the end of the layby term. It is within your rights as a consumer to cancel the transaction. When you do this you should get a complete refund, minus whatever was paid for the service fee and the cancellation fee.

Can you have multiple items under one layby agreement?

In certain circumstances or stores, you may be able to have multiple items under one layby. This may not be the most beneficial course of action, however, as all the instalments must be repaid before you get any of your goods. So, if you add multiple items to your layby you will increase the amount that you have to repay and therefore the time before you can access your goods.

However, if you are Christmas shopping, and don’t need your items for a couple of months, anyway, this could be a good strategy for you. If an item is not in stock and you are waiting for it to come back in store. You won’t be able to add it to your existing layby. Instead, you may have to look at setting up another agreement or using an alternate purchase method when it is restocked.

Does layby have limits?

Stores and retailers may impose certain terms, limits or conditions. Some stores may have a price cap on how much you can put under one agreement. Smaller stores may be less likely to let you take a layby on multiple products, but may make one-off exceptions.

Keep in mind that taking a layby is a commitment to make a purchase. While it is much easier than a loan or BNPL contract to break, it is not without fees. It may be smart to only utilise a layby if you need a product but would struggle to pay for it otherwise.

Can you modify your layby contents?

Once an agreement is made and the deposit is placed, you will most likely not be able to modify the layby’s contents. If you have had a change of heart about your purchase, you may be better off creating a new layby and cancelling your current one. This means you will get an almost full refund and won’t be required to maintain your regular payments.

Can pensioners get layby discounts?

Yes, in some stores, pensioners may be able to have modifications made to the agreement’s terms and conditions. You may be asked to supply a pension card in order for this alteration to take effect.

Typically, this discount will come in the form of a longer repayment period and a smaller deposit. This can be very useful if you are between the pension, and struggling with your budgeting, yet still need to shop. The good thing about layby is you can layby cheaper items and have them sooner while still being able to put food on the table if you are in a tricky situation.

Top tips

When shopping with the intention of paying by layby, it may be smart to clarify certain details so you know what you can and cannot put on layby. These include the minimum value, the size of the service and cancellation fees, and the minimum payments. It may also be worthwhile to enquire about which items fall under the ‘exclusions’, and what kind of modifications and identification they require.

These aren’t always necessary, you don’t have to actively seek this information. However, as you should with most contracts and agreements, it is always smart to know your rights. Doing so limits the chances of you entering an agreement that doesn’t suit you, or accidentally breaking the terms. Regardless, the store should provide you with a written copy of your agreement. Allowing you to view your terms, should you need to.

Monzi’s lender-finder service

While here at Monzi we know a little about layby, it isn’t our specialty. However, if it is a question you have about our personal loan service, we can definitely try and help. So, if you are looking for a personal loan but have questions, email us at

Or, if you’re ready to apply, scroll up to Monzi’s loan slider at the top of the page. It won’t take very long for you to complete the application process, and from there it’s over to us. We will do our best to match you to a lender in as little as 60 minutes. If we’re successful, your lender will be in touch to try and help.

So what are you waiting for? Begin now!

Apply now from $300 to $10,000.

Let’s be mates!

Not ready to apply? Already found a lender through us and don’t want to forget us? Why not check out our socials?

You can be friends with us on our Facebook, Instagram, Twitter and Pinterest. Stay up to date with all our latest news and info.

Finally, to learn more, check out Moneysmart’s guide to personal loans. Or, if you want some more tips on how to improve your shopping trips, why not read up on PayWave and contactless payments, next? Or, if you want more information on alternate payment methods, check out our before pay article.

Factor In


Two credit cards
Two credit cards

You won't use a penny to apply for our lender-finding service, but here's some costs you could expect from a lender

Loan amount

$300 - $2,000


12 months (minimum)

12 months (maximum)


20% upfront establishment fee

+ 4% monthly fee


Representative example based on a loan of $1000 over 6 months a borrower can expect to pay a total of $1440.

Disclaimer: Under the current legislation, all Small Amount Credit Contract loan providers don’t charge an annual interest rate. The maximum you will be charged is a flat 20% Establishment Fee and a flat 4% Monthly Fee. The comparison rate on loans between $300 and $2000 could be up to 199.43%. The minimum loan term is 16 days and maximum loan term is 12 months. Representative example based on a loan of $1000 over 6 months a borrower can expect to pay a total of $1440. WARNING: This comparison rate is valid only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate with the lender that finances your loan.

Loan amount

$2,100 - $4,600


13 months (minimum)

24 months (maximum)


47.8% Annual Percentage Rate (APR)

65.85% Comparison Rate p.a.


Representative example based on a loan of $2500 over 24 months a borrower can expect to pay a total of $4,556.88.

The maximum interest rate for a Medium Amount Credit Contract is 47.8%. Comparison Rate 65.85% p.a. The maximum loan term is 24 months. Representative example based on a loan of $2500 over 24 months a borrower can expect to pay a total of $4,556.88. WARNING: This comparison rate is valid only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate with the lender that finances your loan. Credit criteria and terms and conditions apply.

Loan amount

$5,000 - $15,000


13 months (minimum)

24 months (maximum)


17% Annual Percentage Rate (APR)

36% Comparison Rate p.a.


Representative example based on a loan of $10,000 over 36 months a borrower can expect to pay a total of $16,489.

The starting interest rate for a Personal Loan is 17%. Comparison Rate 36% p.a. The maximum loan term is 24 months. Representative example based on a loan of $10,000 over 36 months a borrower can expect to pay a total of $16,489. WARNING: This comparison rate is valid only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate with the lender that finances your loan. Credit criteria and terms and conditions apply.