Offering Lay-by services is essential if you want to grow sales revenue in almost any time of business.
Big businesses usually have strong LayBy offerings. It takes commitment and discipline. Once the processes are in place, staff trained and your system setup, it can run like clockwork.
Lay-Bys provide shoppers an opportunity to purchase today what they are unable to fully pay for today.
Key to your success with Lay-bys is having a streamlined and consistent process for processing Lay-bys, storying lay-by product, collecting payment and tracking customers.
One mistake with managing Lay-bys can be expensive.
Use software in your business to track Lay-bys. Do not do it manually. Of course, we recommend the Tower Systems POS software – it has LayBy facilities ready to go.
Use the software to capture the sale, record customer details, document your terms and conditions, record the deposit, track payments, chase late payments and finalise the sale. Again, to not attempt to do this manually.
Be complete in what you record. Only Lay-by stock for which you have records in your software, always enter full customer details such a full name, complete address and an ID number such as a driver’s licence number.
If you are not complete in your records keeping at some point this will cost you money.
In your software set your deposit requirements, payment requirements and other Lay-by terms. This provides a foundation of consistency for you and your employees.
IMPORTANT: Before you begin, familiarise yourself with LayBy regulation as set by the ACCC: https://www.accc.gov.au/consumers/contracts-agreements/lay-by-agreements
Also, check the website of your state Consumer Affairs office to familiarise yourself with local requirements. Information there will help you determine your own terms.
Meeting regulatory requirements is vital. For example, if someone cancels a LayBy you must refund their payments less a termination fee. You can set this fee and advise as part of your terms and conditions.
Our practical advice guides you through key rules and steps to success with Lay-bys.
- WHAT TO LAY-BY. Set a minimum item and or purchase value. We’d suggest $80.00.
- DATA REQUIRED. Always ensure you are satisfied you know who your customer is. Require proof of ID from a driver’s licence or similar legal ID document.
- 20% of the total GST inclusive purchase price.
- Only Lay-by to people 18 and over.
- Lay-bys should run for between eight and twelve weeks. You could run for longer pre Christmas to get early toy sales.
- PAYMENT CYCLE. Require payments to be made weekly or fortnightly.
- PAYMENT METHOD. Accept any payment form you choose.
- Do not allow someone to take home a single item from a group of items on Lay-by together in one purchase. It’s all or nothing.
- Have a LayBy termination policy you are comfortable with. We suggest a 20% termination fee. Alternatively, set a dollar amount to reflect the work. Also, consider setting the LayBy to auto terminate if it extends beyond a period of time you nominate. Note that you could equally choose to have no cancellation given that Lay-by product may not be able to easily re-sold.
- Decide what you would consider a breach. This has to be something you stand by. We suggest two missed payments without reasonable excuse or rectification. On breach, cancel and charge the cancellation fee.
- We suggest a no-exchange policy.
- When a customer Lay-bys, print two dockets – one for them to take immediately and one to be placed with the goods. Have your customer sign both copies, accepting your terms and conditions.
- Set aside a clean and secure storage location for Lay-bys in your business where locations are coded for easy finding. Place Lay-by goods into a single clear plastic bag per transaction for clean and safekeeping. Staple to this a copy of the Lay-by docket. Let your customers see you do this so there is no doubt when it comes time to collect the products.
- Have one person responsible for Lay-bys to ensure product care, track payments and contact customers.
- TERMS AND CONDITIONS. Enter these into your software so they are included on every Lay-by docket. Points 2 through 11 above are a good example of what to include in your terms and conditions.
- COMPLETE PAPERWORK. To not over complicate things, rely on your software’s Lay-by docket as your complete paperwork / contract. Get that right and Lay-by management will be easier.
These rules and steps may feel complex. They are necessary for the small number of times something goes wrong and you need to rely on them to help you deal with a situation.