Three-Day Rule To Canceling Certain Sales
About
Information on the "three day rule"
The Federal Trade Commission's Three-Day Rule is also known as "The Cooling-Off Rule" which allows you three days to cancel certain sales.
If you were pressured into a sales contract or a deal, this rule is used to protect you. However, this is a very limited rule and will only apply to certain situations. A typical scenario where this rule is applicable would be when solicitors go door to door selling their things or their services. For example, a door-to-door solicitor convinced you to purchase a new roof or pressured you into buying some type of home improvement that you are just not sure you really need.
What You Need To Know About The Three Day Rule
The "three-day rule" applies to these kinds of sales contracts
- A sale that was executed at your home and was greater than $25
- A sale that was greater than $130 and was executed at a "temporary place" (e.g. flea market, tent, along the roadside)
General requirement:
The sale must have been "for goods or services" and must mainly be for your personal, your family's, or household's use. A typical example would be the sale of lessons, other instructions, or training courses.
The "three-day rule" will NOT apply if the sale was:
- made to meet any emergency
- made completely online, or by mail, or by telephone
- made after agreeing to the terms while at the seller's permanent place of business that sells the goods/services you bought
- made because you requested the seller to come to your home to repair or perform maintenance on your property; however, anything you buy other than that repair or maintenance is covered
- involving any real estate, insurance, or securities (like stock)
- to purchase a car, van, truck, or any other motor vehicle sold at a temporary location when the seller has at least one permanent place of business
- to purchase any arts or crafts sold at fairs or places like shopping malls, civic centers, or schools
Cancelling the Sale
What You Need To Know About Cancelling The Sale
You have a right to cancel the sale for a full refund until midnight of the third business day after the date of the sale or the date you signed the contract
Note: Saturday is considered a business day. Sundays and federal holidays are not considered a business day
Explanation of three business days:
- If the sale happens on a Monday during a week without a federal holiday, you will have until midnight on Thursday to cancel the contract
- If the sale happens on a Monday when Tuesday is a federal holiday, you will have until midnight on Friday to cancel the contract
- If the sale happens on a Friday, you will have until midnight on Tuesday to cancel, assuming there is not a federal holiday on Monday or Tuesday
- If the sale happens on a Friday, and the following Monday is a federal holiday, you will have until midnight on Wednesday to cancel
You do not need or have to give a reason for canceling the sale. You have a right to change your mind within three business days.
By law, the seller should have told you about your right to cancel the sale at the time the sale was made.
Additionally, the seller should have given you:
- Two copies of a cancelation form - One of the copies is for your records and the second copy is for you to send to the seller if and when you decide to cancel your purchase
- A copy of your contract or the receipt - On the contract or receipt there needs to be a date of purchase, the name and address of the seller, and a statement explaining your right to cancel the purchase
Note: The contract or receipt should be in the same language that was used in the sales presentation
How to cancel the sale:
1. Sign and date one of the copies of the cancellation form that the seller gave you
2. Mail it to the address given to you in the contract, or by the seller, for cancellations
3. It is very important to make sure the envelope is postmarked before midnight of the third business day after the contract date
4. Make sure you keep a copy of the cancellation form for your records
If the seller did NOT give you cancellation forms:
1. Write a cancellation letter. It must be postmarked within three business days of the sale
2. Send the cancellation form or letter by certified mail or another post office service that includes tracking information so you can access a report showing when you mailed it and when it was delivered.
3. It is important to keep a copy of the letter or cancellation form for your records
After the cancellation, the seller has 10 days to do the following:
- Cancel the sale and return any check you signed
- Refund all of your money paid
- Return any property you might have traded in during the transaction
- Tell you if any product you still have will be picked up or abandoned
The seller has 20 days to either:
- Pick up the items left with you, OR
- Reimburse you for mailing expenses if you agree to send back the items
If the sale is covered under the three-day and the seller does not follow the rules, you may do the following:
- If you used a credit card, you can dispute the charges based on a violation of the "FTC Cooling off rule"
- You may also report the violation to the FTC at ReportFraud.ftc.gov
- In some cases, you may be able to use the violation as part of a lawsuit