Je restitue les clés au lieu de les garder.

Au lieu de means instead of.

It is followed by:

• a noun: au lieu des clés = instead of the keys
• or, as here, an infinitive: au lieu de les garder = instead of keeping them

So in this sentence, au lieu de les garder means instead of keeping them.

Because the full expression is au lieu de.

So the structure is:

au lieu de + infinitive

Examples:

• au lieu de partir = instead of leaving
• au lieu de parler = instead of speaking
• au lieu de les garder = instead of keeping them

The de is required by the expression.

Because les is a direct object pronoun, and in French object pronouns usually come before the verb they belong to.

Here, les replaces les clés:

• garder les clés = to keep the keys
• les garder = to keep them

Even though garder is an infinitive, the pronoun still goes before it:

• de les garder not
• de garder les and not
• de garder elles

So les garder is the correct order.

Les refers to les clés.

The sentence first mentions les clés, and then avoids repeating the full noun by using the pronoun les:

• Je restitue les clés = I return the keys
• au lieu de les garder = instead of keeping them

Since clés is plural, the pronoun is also plural: les = them.

In French, you usually need an article before a noun. So clés normally appears with les, des, ces, etc.

Here, les clés means the keys.

French often uses articles where English may be more flexible. A bare noun like clés by itself would usually sound incomplete in a normal sentence.

Both restituer and rendre can mean to return, but they are not exactly the same in tone.

• rendre is the more common, everyday verb
• restituer is more formal and often suggests giving something back to its rightful owner or handing it back officially

So:

• Je rends les clés = very common everyday French
• Je restitue les clés = more formal, more precise, sometimes administrative or legal in tone

This sentence sounds a bit more formal because of restitue.

Restitue is the present tense of restituer:

• je restitue

The French present tense can be used in several ways, including:

• for something happening now: I am returning the keys
• for a general or habitual action: I return the keys
• sometimes for a near-future or planned action, depending on context

Without more context, je restitue can simply be understood as I return / I’m returning.

You actually could say Je les restitue if you wanted to replace les clés with a pronoun.

Compare:

• Je restitue les clés = I return the keys
• Je les restitue = I return them

In your sentence, the speaker keeps the noun les clés in the first part, then uses the pronoun les only in the second part to avoid repetition:

• Je restitue les clés au lieu de les garder

That is completely natural.

Yes. Au lieu de garder les clés is also correct.

Compare:

• Je restitue les clés au lieu de les garder
• Je restitue les clés au lieu de garder les clés

Both are grammatical, but the version with les is more natural because it avoids repeating les clés.

French, like English, often prefers a pronoun when the noun was just mentioned.

Because au is the contraction of à + le.

So:

• à + le = au

Historically and grammatically, au lieu de contains that contraction. In modern French, though, au lieu de should really be learned as a fixed expression meaning instead of.

You do not normally analyze it word by word when using it.

Here, garder means to keep.

Garder often means:

• to keep
• to hold on to
• to retain

Examples:

• garder un livre = to keep a book
• garder les clés = to keep the keys

It does not mean to stay here. The French verb for to stay is usually rester.

Clés is pronounced like clay in English, roughly /kle/.

A few useful points:

• clé or clef both mean key
• clés is the plural of clé
• the final s is normally silent

So:

• la clé = the key
• les clés = the keys

In modern French, clé is very common, though clef also still exists.

The sentence follows this pattern:

Je + verb + noun + au lieu de + infinitive phrase

More specifically:

• Je = subject
• restitue = conjugated verb
• les clés = direct object
• au lieu de = instead of
• les garder = infinitive phrase, with les referring back to les clés

So the structure is:

I return the keys instead of keeping them.

That makes it a very useful model for building similar sentences, such as:

• Je pars au lieu d’attendre.
• Elle téléphone au lieu d’écrire.
• Nous vendons la voiture au lieu de la réparer.