Consumer rights: 'I changed my mind about a bike, but the shop won't return my deposit'

A shopkeeper is not obliged to refund a down-payment...gap-year finances...sorting out benefits for a dying father

Q. I paid a local retailer a 10 per cent deposit in part-payment for a bicycle.

When I paid it I explained that I was going abroad but would pay the balance as soon as I returned. I don't have the exact dates to hand, but it may have been up to eight weeks later, I had changed my mind and decided not to proceed with the purchase.

When I contacted the store and advised them that this was the case the manager explained that my deposit was neither refundable nor, because of the time that had lapsed, transferable.

I would appreciate it if you could advise me on whether there is any law or convention that governs how a deposit should be dealt with.

JT, Oxfordshire

A. When you agree to pay a deposit in part-payment for something like your bicycle it becomes part of the legal contract between you and the retailer.

That contract gives both of you rights and responsibilities. If you pay the deposit on something that the retailer is ordering especially for you, has made for you (windows for example) or is holding or reserving for you, then the shop can legally keep the deposit if you change your mind.

The retailer could argue in this case that he or she could have sold the bicycle had they not kept it for you, or because it was taking up space he or she couldn't display another one, or that they'd ordered it in specially and you should buy it as agreed or pay compensation for his or her loss of profit.

There may not be any loss of profit if the retailer can simply put the bike back on sale, but if prices have dropped or the bike is no longer as attractive to cyclists as it was at the time you ordered it, it may have to be sold at a reduced price. This is a discussion you'd have to have with the retailer.

If the boot was on the other foot and the retailer let you down and didn't keep the bike for you as agreed, the contract would work in your favour. You would be entitled to your deposit back and claim compensation if it cost you more to buy the same bike elsewhere.

Whether you can negotiate a refund now is down to how persuasive you can be!

Q. My son is going on a gap year when he finishes school in June. He and a couple of friends want to go further afield than Europe. They're all fairly sensible and streetwise so we're not so much worried about his safety as about his finances.

Money isn't his strongest suit and we can't afford for him to throw it around as we have two other children still at school. We'd prefer that he wasn't reliant on debit or credit cards as we're not 100 per cent sure if they're the safest option and we want to keep him on a budget.

We thought about giving him cash for different countries but that feels like a disaster waiting to happen. Do you have any advice?

DM, South London

A. Helping your son get organised now will give you time to work on the message that he needs to make a budget and stick to it. I hope though that his friends' parents are saying similar things to their offspring or the others might have more to spend, lead him astray, and undo all your hard work.

A prepaid currency card might be the answer you're looking for. The currency rate on these is usually better than the one offered if you use your debit card while you're away. Prepaid cards are typically Visa or MasterCard, so they can be used like a normal debit/ credit card wherever you see the Visa or MasterCard signs.

The card isn't tied to your bank account, so if it is lost or stolen then only the money on the card is at risk rather than your account, and the card can be quickly stopped and reissued, wherever you are in the world. Prepaid cards are simple to top up online and some offer SMS top-up – so you can pay in emergency funds if needed.

As your son is going to countries with different currencies you want a card that allows you to top it up with money in sterling which is then taken from your account, in whatever currency zone he is in, at the time he spends it. Shop around, though, as some cards charge for withdrawals from ATMs abroad.

James Hickman, the managing director of Caxton FX Global (which produces the Traveller Card), says: "Make sure your son always pays in the local currency. Sometimes merchants, when you pay with your debit or credit card, will ask if you want to pay in pounds rather than the local currency. Choosing to pay in pounds means that the exchange rate is selected by the merchant, but is usually less favourable to the cardholder than the rate offered by the card issuer, so the merchant gets more money from the transaction."

Q. My dad has just been granted Employment and Support Allowance as he's too ill to work. However the letter came with another form to fill in about how the illness affects his ability to work, and seems to suggest he'll have to go for a face-to-face assessment. Since he applied for the allowance, doctors have told him he has just a short time to live and there's no way he could go anywhere for an assessment. All this form-filling is really difficult as he can't concentrate and I don't have all the information. Can you help?

MB, Rochdale

A. I'm really sorry to hear about your dad. The form is the Limited Capability for Work questionnaire. Your dad will have been granted his Employment and Support Allowance (ESA) for 13 weeks while an assessment of capability for work is carried out.

The ESA work capability assessment is carried out by a health care professional working on behalf of the Department for Work and Pensions. It's intended to find out whether your dad has a "limited capability for work" or for "work-related activity".

He should be automatically treated as having a limited capability for work or a limited capacity for work-related activities as he is terminally ill. This is defined as a progressive disease and death in consequence of that disease can reasonably be expected within six months. A patient may also be automatically entitled to the benefit if he or she is receiving chemotherapy or recovering from that treatment.

In your father's case the questionnaire asks a lot of questions that are not relevant now. You need to provide proof of your father's situation and the easiest way to do that is to get a DS1500 form from your doctor. If you still feel you need help ask your nearest advice agency such as Citizens Advice Bureau (see the phone book for details or www.citizensadvice.org.uk). There's more information at www.direct.gov.uk/benefits.

Also ask about applying for Disability Living Allowance and Carers Allowance.

www.moneyagonyaunt.com

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