FTC FACTSfor Consumers

SHOPPING AT HOME

1-877-FTC-HELP

FEDERAL TRADE COMMISSION FOR THE CONSUMER

www.ftc.gov

The Cooling-Off Rule:

f you buy something at a store and later change your mind, you

may not be able to return the merchandise. But if you buy an item

in your home or at a location that is not the seller's permanent place of business, you may have the option. The Federal Trade Commission’s (FTC’s)

Cooling-Off Rule gives you three days to cancel purchases of $25 or more.

Under the Cooling-Off Rule, your right to cancel for a full refund extends until

midnight of the third business day after the sale.

The Cooling-Off Rule applies to sales at the buyer’s home, workplace or dormitory, or at facilities rented by the seller on a temporary or short-term basis, such

as hotel or motel rooms, convention centers, fairgrounds and restaurants. The

Cooling-Off Rule applies even when you invite the salesperson to make a presentation in your home.

When and How

to Cancel a Sale

I
Facts for Consumers

Under the Cooling-Off Rule, the salesperson

must tell you about your cancellation rights at

the time of sale. The salesperson also must give

you two copies of a cancellation form (one to

keep and one to send) and 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. The

contract or receipt must be in the same

language that's used in the sales presentation.

Some Exceptions

Some types of sales cannot be canceled

even if they do occur in locations normally

covered by the Rule. The Cooling-Off Rule

does not cover sales that:

N are under $25;

N are for goods or services not primarily

intended for personal, family or household purposes. (The Rule applies to

courses of instruction or training.);

N are made entirely by mail or telephone;

N are the result of prior negotiations at the

seller’s permanent business location where

the goods are sold regularly;

N are needed to meet an emergency. Suppose insects suddenly appear in your

home, and you waive your right to cancel;

N are made as part of your request for the

seller to do repairs or maintenance on

your personal property (purchases made

beyond the maintenance or repair request

are covered).

Also exempt from the Cooling-Off Rule are

sales that involve:

N real estate, insurance, or securities;

N automobiles, vans, trucks, or other motor

vehicles sold at temporary locations,

provided the seller has at least one permanent place of business;

N arts or crafts sold at fairs or locations

such as shopping malls, civic centers, and

schools.

How to Cancel

To cancel a sale, sign and date one copy

of the cancellation form. Mail it to the address

given for cancellation, making sure the

envelope is post-marked before midnight of the

third business day after the contract date.

(Saturday is considered a business day; Sundays

and federal holidays are not.) Because proof of

the mailing date and proof of receipt are

important, consider sending the cancellation

form by certified mail so you can get a return

receipt. Or, consider hand delivering the

cancellation notice before midnight of the third

business day. Keep the other copy of the

cancellation form for your records.

If the seller did not give cancellation forms,

you can write your own cancellation letter. It

must be post-marked within three business days

of the sale.

You do not have to give a reason for canceling

your purchase. You have a right to change your

mind.

If You Cancel

If you cancel your purchase, the seller

has 10 days to:

N cancel and return any promissory note or

other negotiable instrument you signed;

N refund all your money and tell you

whether any product you still have will be

picked up; and

N return any trade-in.
Facts for Consumers

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 you received any goods from the seller, you

must make them available to the seller in as

good condition as when you received them. If

you do not make the items available to the

seller — or if you agree to return the items but

fail to — you remain obligated under the

contract.

Problems

If you have a complaint about sales

practices that involve the Cooling-Off Rule,

write: Consumer Response Center, Federal

Trade Commission, Washington, DC 20580.

The Rule’s complete name and citation are:

Rule Concerning Cooling-Off Period for Sales

Made at Homes or at Certain Other Locations;

16 CFR Part 429.

You also may wish to contact a consumer

protection office in your city, county, or state.

Some state laws give you even more rights than

the FTC’s Cooling-Off Rule, and some local

consumer offices can help you resolve your

complaint.

In addition, if you paid for your purchase with

a credit card and a billing dispute arises about

the purchase (for example, if the merchandise

shipped was not what you ordered), you can

notify the credit card company that you want to

dispute the purchase. Under the Fair Credit

Billing Act, the credit card company must

acknowledge your dispute in writing and

conduct a reasonable investigation of your

problem. You may withhold payment of the

amount in dispute, until the dispute is resolved.

(You are still required to pay any part of your

bill that is not in dispute.) To protect your

rights under the Fair Credit Billing Act, you

must send a written notice about the problem to

the credit card company at the address for

billing disputes specified on your billing

statement within 60 days after the first bill

containing the disputed amount is mailed to

you.

If the 60-day period has expired or if your

dispute concerns the quality of the merchandise

purchased, you may have other rights under the

Act. If you have questions about the Fair Credit

Billing Act, write for the free brochure Fair

Credit Billing. Write: Consumer Response

Center, Federal Trade Commission,

Washington, DC 20580.

For More Information

The FTC works for the consumer to

prevent fraudulent, deceptive, and unfair

business practices in the marketplace and to

provide information to help consumers spot,

stop, and avoid them. To file a complaint or to

get free information on consumer issues, visit

www.ftc.gov or call toll-free, 1-877-FTCHELP (1-877-382-4357); TTY: 1-866-653-

4261. The FTC enters Internet, telemarketing,

identity theft, and other fraud-related

complaints into Consumer Sentinel, a secure,

online database available to hundreds of civil

and criminal law enforcement agencies in the

U.S. and abroad.
Federal Trade Commission

Bureau of Consumer Protection

Office of Consumer and Business Education

May 1996

F C EDERAL RADE OMMISSION T FTC OR HE ONSUMER

1-877-FTC-HELP www.ftc.gov

Facts for Consumers