Paying a deposit
A deposit is a part-payment for a product or service. When you pay a deposit it shows that you intend to buy a product or service and you enter into a contract with the supplier. It is easier to know what your rights and responsibilities are if you have the contract in writing, but a verbal contract is also enforceable.
When you pay a deposit, you and the supplier agree:
- the exact product or service that you are buying
- the deposit amount you pay
- when the balance has to be paid
- when the product or service will be provided
It is important to make sure that you and the supplier are clear about all the details. Ask for written confirmation that includes all of this information above.
Be very clear about the seller’s obligations - in particular, be clear on what exactly the product is, and when it will be delivered or available. This can be very important when you are buying an expensive product which might have to be made for you, such as a large piece of furniture like a sofa. Make sure you are clear about any options, like the colour and style of the sofa, and ask the seller to confirm this in writing on your receipt.
If a seller tells you that your delivery will be delayed, you should try to agree a new, reasonable date for delivery. If the product is delivered and is not what you ordered, you should contact the seller immediately to arrange for it to be changed. This is why it is important for you to have written confirmation of what exactly you ordered.
You have a right to ask for your deposit back if:
- you cannot agree a new delivery date
- the new delivery date suggested is way off what you originally agreed
- the supplier fails to meet the new agreed delivery date
- the supplier cannot provide you with the product you agreed to buy.
If the seller refuses to return your deposit, you may have to take legal action to try to get the deposit back.
Remember, deposits are usually non-refundable. If you pay a deposit and then change your mind about the product or service, the supplier or seller may not have to return your deposit.
If the shop goes out of business
If you pay a deposit and the shop or seller goes out of business, it may be very difficult to get the product or service or your money back. Your deposit will not be a priority for the business if it goes into liquidation or receivership.
You should always try to pay a large deposit using a debit or credit card. If you pay for goods by credit or debit card, and the supplier goes out of business, your card provider can reverse the transaction. This is called a chargeback. Contact your bank immediately and give them details of your transaction.