The U.S. Federal Trade Commission’s Cooling-Off Rule provides consumers with a safeguard against buyer’s remorse by allowing them to cancel certain types of sales within three days.
This rule applies specifically to sales made at locations other than the seller’s permanent place of business—such as door-to-door sales made at homes, workplaces, dormitories, or at temporary locations like hotel rooms, convention centers, or fairs. The total purchase must be $25 or more to qualify for cooling-off.
However, there are several types of sales that the consumer-protection rule doesn’t cover. These include sales made entirely online, by mail, or by telephone, sales for real estate, insurance, or securities, and sales of vehicles sold at temporary locations if the seller has at least one permanent place of business. The rule also exempts arts and crafts sold at fairs or locations like shopping malls, schools, or parks.
Sellers are obligated to inform buyers about their right to cancel. By law, they must provide a copy of the sales contract or receipt at the time of purchase, which should be dated, show the name and address of the seller, and explain the buyer's right to cancel the contract.
The seller must also provide two copies of a cancellation form that the buyer can use if they decide to cancel the purchase.
To cancel a sale, a buyer needs to sign and date one copy of the cancellation form and mail it to the address given on the form before midnight of the third business day after the sale. Sending the form by mail within this time frame is sufficient to effect the cancellation.
