What happens when I pay a deposit for goods or services?
When you pay a deposit you are paying a percentage of the price of a product or service. Paying a deposit shows that you intend to buy the item and it means you are entering into a contract with the business. When you pay a deposit, you and the business agree:
- the exact product or service that you are buying
- the deposit amount
- when the balance has to be paid
- the date that the product or service will be provided
It is important to make sure that you and the business are clear about all the details. Ask for written confirmation that includes all of the information above.
Make sure you are clear about the business’s obligations to you – in particular, confirm exactly what the product is and when it will be delivered or available to you. This can be very important when you are buying something expensive which might have to be custom made for you, such as a piece of furniture. Make sure you are both clear about the details, like the colour and style, and ask the business to confirm this in writing on your receipt.
If the business 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 business immediately to arrange for it to be changed. In these situations, it is important for you to have written confirmation for proof of what you ordered.
When can I ask for a refund of my deposit?
You have a right to ask for your deposit back if:
- you cannot agree a new delivery date
- the new delivery date suggested is much later than you originally agreed
- the business fails to meet the new agreed delivery date
- the business cannot give you the item you agreed to buy
If the business refuses to return your deposit, you may have to take legal action to try to get your deposit back. If your claim is less than €2,000, you can use the Small Claims procedure to try and resolve the issue. It costs €25 to lodge an application with the Small Claims Registrar and the procedure is a relatively cheap, fast and easy way for consumers to resolve some types of disputes, generally without having to use a solicitor.
If I change my mind about buying the item or service, can I get my deposit back?
The obligations of the contract work both ways so the business doesn’t have to return your deposit if you change your mind. For example, if you paid a deposit to a shop to hold an item for you and you later decide you don’t want the item, the shop may not be obliged to refund you your deposit. If you signed a contract, there should be details in the terms and conditions about paying a deposit and whether a refund is possible.
What happens if the shop goes out of business?
If you pay a deposit and the shop goes out of business, it may be very difficult to either get the item or get your deposit back. If the business goes into liquidation or receivership you become a creditor, but other creditors such as staff, the Revenue, banks etc are likely to take priority in terms of payments.
You should always try to pay a large deposit using a debit or credit card. If you pay for items using a card, and the shop goes out of business, contact your card provider straight away with details of the transaction and request a chargeback.