Canceling a Sale: The Cooling-Off Period

Once you sign or enter a sales agreement, you typically can't take it back. You'd have to accept the terms, including paying the sale costs. Sadly, some customers suffer buyer's remorse when they realize too late that they made the wrong decision.

There are a few types of contracts that you can cancel. Some federal laws allow parties who enter an agreement to cancel it within a few days. These laws are often called "cooling-off rules." They are part of a broader set of consumer protection laws.

Many types of products and services don't give you a cooling-off period. Take some time to learn about your consumer rights before agreeing to a purchase or subscription.

Do I Have a Right To Cancel My Purchase?

Your ability to cancel a sale depends on your purchase or lease type. According to the Federal Trade Commission (FTC), the cooling-off law applies in just a few scenarios, not all transactions. For example, you can't cancel a real estate purchase like buying a house.

The Cooling-Off Rule applies to types of sales such as:

• Trade show and fairground sales contracts
• Contracts for home equity loans
• Internet purchase contracts
• Door-to-door sales contracts
• Agreements made during a restaurant meal

Buying new shoes at the mall usually wouldn't give you federal cancellation rights. Instead, you could try to return and refund the shoes at the store, which involves different laws.

A few states have also passed laws for canceling contracts. These states expand the legal protections and eligible sale types to protect their residents better.

Trade Show and Door-to-Door Sales Contracts

A high-energy sales presentation can be convincing until you wake up the next morning with a lighter wallet and sudden regret. The FTC's Cooling-Off Rule gives you until midnight of the third business day after entering into certain contracts to cancel them.

You do not need a legally justifiable reason for canceling a trade show or door-to-door sales contract. If you change your mind, you can validly cancel the contract for your original purchase.

This rule does not apply at public car auctions or craft fairs. If you contract to buy a wooden sculpture at a craft fair, you may be unable to cancel it.

Purchase Cost Limits for Cancellation

You can cancel door-to-door sales contracts of $25 or more, and you can cancel purchases of $130 or more that you made at any place other than a seller's permanent place of business, such as a trade show.

For example, if you signed a $200 contract to buy chocolate from a door-to-door salesperson, you could cancel this contract the next day. You could cancel a rare comic book order for $2000 at a trade show within three days if the seller used the show as a temporary location.

Canceling Contracts for Catalog and Online Shopping

Online shopping often happens at a buyer's home, though customers can shop anywhere using mobile devices. Shopping online or through the mail differs from a door-to-door sale, and the cancellation laws change.

You may still be able to cancel contracts for mail, website, and phone purchases. The Federal Trade Commission provides a Mail, Internet, or Telephone Order Merchandise Rule. The rule allows you to cancel a sale if it meets certain conditions.

Canceling After Shipping Delays Under Federal Law

A seller must ship the product to you in the promised time. If they didn't give you an estimated shipping time, the FTC's rule says that the seller must ship it within 30 days.

If the seller fails to ship the goods on time, it must send you a notice with a new shipment time. The seller must also offer you the option to cancel the order. If you don't cancel the order, the seller must ship it by the new promised time.

If the seller fails to make the shipment again, it must notify you and ask you to agree to a third date. If you do not want a new shipment date or do not respond, the seller must cancel your order and refund your entire purchase price. The seller must issue your refund within one billing cycle if your payment is returned to your credit card. Otherwise, it must issue your refund by check or money order within seven days.

Internet, Phone, and Mail Sale Exclusions

The FTC's Mail, Internet, or Telephone Order Merchandise Rule generally covers more sales types than the Cooling-Off Rule. Yet, it excludes certain services and companies.

Here are a few examples of exclusions:

• Photo development and processing
• Plant seeds
• Potted plants and fresh flowers
• Serialized magazine subscriptions

You may try to return these products by negotiating with the seller, but no federal law requires a cancellation option. Customers still have legal grounds to seek a refund or replacement if the product is defective or the seller deceived them.

Canceling a Contract Under State Laws

Some states have individual laws that allow consumers to cancel contracts within a few days after the time of the sale. They typically specify whether the salesperson must issue a full refund or the buyer must return the products they already received.

These state laws often allow buyers to cancel contracts for more kinds of goods and subscriptions, such as:

• Diet programs
• Gym memberships
• Dating services
• Medical products

For example, Washington state law allows residents to cancel a hearing aid purchase within 30 days under certain conditions.

If you are curious about the laws of your state, you can call your state's consumer protection agency. The agency can help explain what kinds of contracts you can cancel without penalty.

Problems With a Recent Purchase? Get Legal Help

Consumer protection laws are rife with exclusions and complications. Your options to return a product or cancel a sale can be confusing. Speaking with an experienced consumer transaction lawyer can help clarify your rights.