Buyer’s Remorse: The FTC’s Cooling-Off Rule May Help

If you’ve ever asked yourself “what have I done?” after buying something, you’re not alone. Maybe you signed up for a pricey sales training program at a multi-level marketing company’s recruiting meeting. Or, someone selling door to door convinced you to pay for a home improvement like a new roof that you’re not sure you really need. High-pressure sales tactics can leave you wishing you had slowed down and done some research before signing on the dotted line. The FTC’s Cooling-Off Rule may help.

• What Is the FTC’s Cooling-Off Rule?
• Types of Sales the Rule Doesn’t Cover
• The Seller Must Tell You About Your Right To Cancel
• How To Cancel a Sale
• The Seller’s Obligations If You Cancel
• Report Problems

What Is the FTC’s Cooling-Off Rule?

The Cooling-Off Rule gives you three days to cancel certain sales made at your home, workplace, or dormitory, or at a seller’s temporary location, like a hotel or motel room, convention center, fairground, or restaurant. The Rule also applies when you invite a salesperson to make a presentation in your home. But not all sales are covered.

Types of Sales the Rule Doesn’t Cover

Some types of sales can’t be canceled, even if they occur in places that the Cooling-Off Rule normally covers. The Rule doesn’t cover sales that are

• under $25 for sales made at your home
• under $130 for sales made at temporary locations
• for goods or services not mainly for personal, family, or household use (but the Rule applies to instruction or training courses, regardless of your reason for taking them)
• made entirely online, by mail, or telephone
• made after completing negotiations at the seller’s permanent place of business, where the seller regularly sells the goods or services you bought
• needed to meet an emergency
• made because you asked the seller to visit your home to repair or perform maintenance on your personal property. (Things you buy beyond that repair or maintenance request are covered.)

In addition, the Rule doesn’t cover sales that involve

• real estate, insurance, or securities
• cars, vans, trucks, or other motor vehicles sold at temporary locations, if the seller has at least one permanent place of business
• arts or crafts sold at fairs or places like shopping malls, civic centers, and schools

The Seller Must Tell You About Your Right To Cancel

By law, the seller has to tell you at the time of the sale about your right to cancel. The seller also must give you

• Two copies of a cancellation form. One copy is for you to keep. The other copy is to send to the seller if you decide to cancel your purchase.
• A copy of your contract or receipt. The contract or receipt should be dated, show the name and address of the seller, and explain your right to cancel.
  • Note: The contract or receipt must be in the same language that’s used in the sales presentation.

  How To Cancel a Sale

  Your right to cancel for a full refund lasts until midnight of the third business day after the sale. Saturday is considered a business day, but Sundays and federal holidays are not. So

  • If the sale happens on a Monday in a week without a federal holiday, you have until midnight on Thursday to cancel.
  • If the sale happens on a Monday and Tuesday is a federal holiday, you have until midnight on Friday to cancel.
  • If the sale happens on a Friday, you have until midnight on Tuesday to cancel, if there are no federal holidays on Monday or Tuesday.
  • If the sale happens on a Friday and the following Monday is a federal holiday, you have until midnight on Wednesday to cancel.

  Note: You don’t have to give a reason for canceling. You have a right to change your mind.

  • To cancel a sale, sign and date one copy of the cancellation form. Mail it to the address given for cancellations. Make sure the envelope is postmarked before midnight of the third business day after the contract date.
  • If the seller didn’t give you cancellation forms, write a cancellation letter. It must be postmarked within three business days of the sale.
  • Send the cancellation form or letter by certified mail. You’ll get a return receipt so you have proof of when you mailed it and when it was delivered. Also, keep a copy of the letter or cancellation form for your records.

  The Seller’s Obligations If You Cancel

  If you cancel your purchase, the seller has 10 days to

  • cancel and return any check you signed
  • refund all your money
  • return any property you might have traded in
  • tell you if any product you still have will be picked up or abandoned

  Within 20 days, the seller must either pick up the items left with you, or reimburse you for mailing expenses if you agree to send back the items.

  If the seller gave you any items, you must make them available to the seller in as good condition as when you got them. If you don’t make the items available to the seller — or if you agree to return them but don’t — you remain responsible for paying the seller as you agreed under the contract.

  Report Problems

  If you think a seller has violated the FTC’s Cooling-Off Rule, report it to

  • the FTC at ReportFraud.ftc.gov
  • your state attorney general and your local consumer protection agency. Some state laws give you more rights than the FTC’s Cooling-Off Rule, and some local consumer offices can help you resolve your complaint.

  If you paid with a credit card and a billing dispute arises about the purchase — for example, if the merchandise shipped was not what you ordered — notify your credit card company that you want to dispute the purchase. Learn about your rights — and how to protect them — when disputing credit card charges.