A lay-by is a contract to pay for goods in two or more instalments, and you do not get the goods until the full price is paid. You can cancel at any time before you receive the ring, and the business must then refund what you have paid, less any termination fee written into the agreement, which can be no more than its reasonable costs.
Lay-by agreements are regulated under the consumer laws the ACCC administers. The life of one runs in five stages.
A lay-by from start to collection
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The agreement, in writing
The business has to give you a written copy of the lay-by agreement, setting out its terms and conditions, termination fees included. Read the fee clause before the first payment: it is the figure that matters if plans change.
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The deposit and instalments
You pay in two or more instalments and the ring stays with the business until the last one. If you pay by card, note a change that began on 1 October 2026: card surcharges are banned for Visa, Mastercard, American Express and eftpos, whether the card is credit, debit or prepaid. Fees unrelated to the way you pay are still allowed. (As at October 2026, per the ACCC’s payment methods page.)
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If you cancel
You may cancel at any point before you receive the ring. The business refunds the deposit and everything else you paid, minus the termination fee in the agreement. If what you have paid is less than that fee, you pay the difference.
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If the business cancels
The ACCC lists only three grounds on which a business can end a lay-by: you broke the agreement (for example by missing instalments), the business has stopped trading, or the product is no longer available for reasons outside its control.
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Collecting the ring
For anything over $75 the business must give you a receipt, showing its name, its ABN or ACN, the product, the date and the price. Keep the lay-by agreement as well: the ACCC counts it as proof of purchase if you later need a repair, replacement or refund.
What cancelling returns
Suppose a lay-by agreement sets a termination fee of $40. The fee here is invented for the sum; by law it cannot be more than the business’s reasonable costs in relation to the agreement.
- Paid so far $300, fee $40: the business refunds $300 − $40 = $260.
- Paid so far $30, fee $40: the payments fall $10 short of the fee, so you pay the business $10.
A deposit when a business goes bust
If a business becomes insolvent (it cannot pay its debts on time), an outside administrator is appointed to try to save it, sell it, or wind it up. The ACCC names a deposit paid under a lay-by as money the business then owes you.
Being owed is not the same as being paid. Customers are usually unsecured creditors, repaid only after secured creditors such as the bank and major suppliers, and after priority unsecured creditors such as employees; the ACCC warns that this can mean getting part of the money back, or none. The steps it describes:
- Check whether the business is insolvent, and who the administrator is, on ASIC’s published notices.
- If you paid by card or another payment service, ask your bank or card provider straight away about reversing the payment (a chargeback); time limits apply.
- Watch the administrator’s announcements: a business still trading under administration may honour lay-bys, sometimes on conditions, and a buyer of the business chooses which old debts it takes on.
- If it has stopped trading, register with the administrator as an unsecured creditor; without that you have no chance of getting money back.
- Some states and territories have funds that compensate customers when a business in a particular industry fails; your state or territory consumer protection agency can say whether one applies.
If a lay-by goes wrong
Where a business has not followed the lay-by rules, the ACCC says your first step is to raise it with the business; if that does not settle it, there are further steps on the ACCC’s site, and anyone can report an issue under consumer law to the ACCC.