Cooling-off Rule for Purchases

What to do when you buy something at home and change your mind.

Federal Citizen Information Center

You purchase something from a salesperson in your home, but have second thoughts and want to cancel. You might want to initiate the "Cooling-off Rule."

If you buy an item from a salesperson in your home and then decide it was not a good purchase, you may have three days to cancel by using the "Cooling-off Rule." This also applies to purchases of $25 or more made at your workplace and places rented by the seller on a temporary basis, such as hotel rooms, convention centers, fairgrounds, and restaurants.

Enforced by the Federal Trade Commission (FTC), the rule requires sellers to tell you that you have three business days after the sale to change your mind.

At the time of the sale, the seller must give you two dated copies of a cancellation form (one to keep and one to send) and a copy of your contract or a receipt showing the salesperson's name and address, explaining your right to cancel.

To cancel a purchase, sign and date one of the cancellation notices and send it by certified mail, postmarked before midnight of the third business day following the sale.

Saturday is considered a business day, but Sunday and legally recognized holidays are not.

Keep the notice of cancellation for your records.

If you were not provided with this form at the time of the sale, your three-day period does not start until you receive it from the seller. You can also write your own letter to cancel the order.

Once you have cancelled, you must be given a refund within 10 days. The seller must notify you of the date for the product pick-up, and return any trade-ins you gave as a down payment.

Within 20 days, the seller must either pick up the items or reimburse you for mailing expenses.

Be aware that there are situations in which the "Cooling-off Rule" does not apply:

• You made the purchase entirely by mail or telephone.
• Your sale was the result of prior contact you made at the seller's permanent business location.
• You signed a document waiving your right to cancel.
• Your purchase is not primarily for personal, family, or household use.
• You were buying real estate, insurance, securities, or a motor vehicle.
• You bought arts or crafts at a fair, shopping mall, civic center, or school.

Remember that if you paid by credit card and are having difficulty getting your refund, you may also be able to dispute the charge to your card under the Fair Credit Billing Act.

This article and hundreds more can be found on the "Member Library" at the NEA Member Benefits Web Site at www.neamb.com.