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Understanding the FTC Cooling-Off Rule

There you are, minding your own business watching TV, when there’s a knock at the door. You open the door and discover it’s some kid selling magazine subscriptions, or a person selling the latest product fad (Sham Wow? Snuggies?), and they go into the hard sell pitch trying to get you to buy one. You tell them no but they are persistent and eventually, either because you’re sick of dealing with them or something about the Snuggie intrigues you, you buy it. When the door closes and the salesperson is gone, you’re angry because you just spent money on something you didn’t really want.

Fortunately the FTC has your back with the Cooling Off Rule.

The cooling off rule gives you three days to cancel purchases of $25 or more and you have until midnight on the third business day to request the refund if you made the purchase outside of where the business is normally conducted. For example, if you walk into a Snuggie Store and buy a Snuggie because you had a mental lapse, that’s not covered by the Cooling Off Rule because Snuggies are normally sold in a Snuggie Store. If you are accosted by a Snuggie Store Salesperson on the street, then you can initiate the cooling off rule and get a refund in three days.

Exception

There are exceptions to the rule, outlined in a Facts for Consumer bulletin published by the FTC [3], and they are:

There are also exemptions – including real estate, insurance, or securities; automobiles, vans, trucks, or other motor vehicles sold at temporary locations, provided the seller has at least one permanent place of business; and arts or crafts sold at fairs or locations such as shopping malls, civic centers, and schools.

How to Cancel

The salesperson is supposed to give you a cancellation form, which you simply have to mail in by certified mail (so you have a dated receipt) within three business days (Saturday is a business day, Sunday and federal holidays aren’t). If no form was provided, write your own letter and mail it within three days.

If you run into any problems, you can contact your local Consumer Protection Office or write the Consumer Response Center:

Consumer Response Center
Federal Trade Commission
Washington, DC 20580

Have you ever used the Cooling Off Rule for anything?

(Photo: stevendepolo [4])