Cooling-Off Rule Explained: Your 3-Day Right to Cancel Door-to-Door Sales
What the Cooling-Off Rule is — and why it exists
The Federal Trade Commission’s Cooling-Off Rule (16 C.F.R. Part 429) gives consumers a three-business-day right to cancel certain sales that happen away from a seller’s permanent place of business — the classic example is a door-to-door sale in your home, but it also includes temporary locations like hotel ballrooms, fairgrounds, or rented meeting rooms. The rule aims to neutralize high-pressure sales tactics by creating a short “cooling-off” window in which you can rethink the deal, cancel without penalty, and get your money back.
In addition to the federal rule, many states have parallel “home solicitation” laws that mirror or expand the 3-day right (e.g., for home improvement, health-club contracts, or timeshares). This guide explains when the federal rule applies, what sellers must disclose, and how to cancel effectively if you change your mind.
Quick Guide (English)
- Applies when: The sale occurs at your home or at a seller’s temporary location; amount meets the federal threshold; it’s primarily for personal/household use.
- Right: Cancel until midnight of the third business day after the sale; business day = Monday–Saturday (Sundays & federal holidays excluded).
- Seller must: Give you a dated receipt/contract, a clear cancellation notice, and a pre-addressed cancellation form.
- How to cancel: Sign/date the form or send a written notice; mail, email, or deliver before the deadline (keep proof).
- Refunds: Seller must refund within 10 days, cancel any financing/negotiable instruments, and return your trade-in.
- Merchandise: You must make goods available for pickup; if the seller doesn’t collect within 20 days, the goods become yours without obligation.
- Important: Exemptions exist (e.g., under threshold amounts, insurance/securities/real estate, motor vehicles sold at the seller’s regular location, and most internet/phone orders).
When the Cooling-Off Rule applies (scope)
The Rule covers sales primarily for personal, family, or household purposes when a salesperson solicits you or concludes the sale:
- At your home, workplace, or dormitory (“door-to-door”); or
- At a temporary location — hotel rooms, convention centers, rented spaces, fair booths, parking lots, or restaurants — that is not the seller’s permanent place of business.
Dollar thresholds. The Rule activates only above certain amounts:
• $25+ when the sale occurs at your home (and similar personal locations).
• $130+ when the sale occurs at a temporary location (like a hotel ballroom or pop-up).
“Graphics” info — Applicability matrix
| Where the sale happens | Amount | 3-day right? | Notes |
|---|---|---|---|
| Your home, workplace, dorm | $25 or more | Yes | Includes door-to-door demos and in-home repair upsells |
| Temporary location (hotel, fair, pop-up) | $130 or more | Yes | Seller is not at its permanent store |
| Seller’s permanent store | Any | No (federal rule) | Retail return policies or state laws may help |
| Mail/phone/online orders | Any | No (federal rule) | Other laws apply (e.g., FTC Mail Order Rule, card chargebacks) |
Who and what is excluded
- Sales under the dollar thresholds.
- Sales made entirely by mail, telephone, or internet.
- Sales negotiated at the seller’s permanent place of business.
- Real estate, insurance, and securities transactions.
- Motor vehicles sold at the seller’s permanent place of business where the vehicles are regularly sold/serviced.
- Sales made for business or resale purposes (non-consumer).
- Emergency home repairs or services that the consumer explicitly requests on a short-notice emergency basis, when the seller provides needed parts/services immediately (the right may not apply to the emergency portion).
State-level add-ons: Some states extend cooling-off rights to specific sectors (home improvement, hearing aids, health clubs, dance studios, timeshares). Check your state consumer-protection agency for extra rights and longer periods.
What sellers must disclose at the time of sale
The seller must hand you, at the time of the transaction:
- A dated receipt or contract that states the seller’s name and address and clearly states your three-day right to cancel.
- A separate cancellation form that you can sign/date and return, with the seller’s address pre-printed.
- Verbal notice of your right to cancel — not just fine print.
If the seller fails to give you the required documents or misstates your rights, the 3-day clock may not start until you receive proper notice — effectively extending your right to cancel.
“Graphics” info — sample cancellation notice (plain-English model)
YOU MAY CANCEL THIS TRANSACTION, WITHOUT ANY PENALTY OR OBLIGATION, AT ANY TIME BEFORE MIDNIGHT OF THE THIRD BUSINESS DAY AFTER THE DATE OF THIS TRANSACTION.
To cancel, sign and return the attached form or send any written notice stating that you cancel to: [Seller name and address]. Keep a copy for your records.
How to use your 3-day right — step-by-step
- Mark the deadline. Count three business days (Mon–Sat). Do not count Sundays or federal holidays. The sale day is Day 0; your deadline is midnight of Day 3.
- Fill the cancellation form the seller gave you, or write your own short notice: “I cancel my purchase of [product/service] made on [date].” Include your name, address, order number.
- Deliver the notice by a method you can prove before the deadline:
- Certified mail with receipt, or
- Courier with tracking, or
- Email to the address printed on the form (if permitted by the contract or instructed in writing), or
- Personal delivery with a signed/dated acknowledgment.
- Keep proof (copies, tracking, screenshots). Save all packaging and the goods in original condition.
“Graphics” info — deadline calculator example
| Event | Date | Count |
|---|---|---|
| Sale occurs (Day 0) | Thu, May 1 | Start at zero |
| Business Day 1 | Fri, May 2 | 1 |
| Business Day 2 | Sat, May 3 | 2 |
| Sun (not business day) | Sun, May 4 | Skip |
| Business Day 3 — deadline | Mon, May 5 | 3 → cancel by midnight |
What happens after you cancel
Within 10 days of receiving your cancellation, the seller must:
- Refund all payments (including down payments),
- Return any trade-in or, if not possible, pay its value,
- Cancel and return any negotiable instruments you signed (e.g., promissory note), and notify any lender to cancel financing.
The seller must also tell you whether they will pick up the merchandise. You must make the goods available at your home in as good condition as when received. If the seller fails to pick them up within 20 days, the goods become yours without obligation. You do not have to ship them back unless the seller gives written instructions and pays return costs.
Financing, credit cards, and trade-ins
- If the deal involved credit (store financing or a third-party lender arranged by the seller), cancellation under the Rule requires the seller to notify the creditor and cancel the agreement.
- If you paid by credit card and the seller refuses a required refund, you may also use the Fair Credit Billing Act to dispute the charge with your card issuer.
- If you gave a trade-in, the seller must return it within 10 days or pay its reasonable value if they cannot.
Special scenarios and practical tips
- Home improvement contracts: Often covered if signed at your home and over the threshold; some states give additional cancellation rights or require specific font sizes in notices.
- Custom or installed goods: The federal rule still applies if the sale qualifies; however, keep items safe and uninstalled during the 3-day period to avoid disputes about condition.
- No paperwork given: If the seller doesn’t give the required notice/cancellation form, your right to cancel remains open until you receive proper documents (or a state-specified extended period).
- Language: The cancellation notice must be in the same language used in the sales presentation (e.g., Spanish), where applicable.
- Deposits labeled “non-refundable”: Such labels do not override the Rule. If you cancel on time, the seller must return the deposit.
“Graphics” info — compliance checklist for sellers
| Item | Requirement | Done? |
|---|---|---|
| Receipt/contract | Dated; shows seller name/address; right to cancel stated | ☐ |
| Cancellation form | Pre-addressed, detachable, easily signed/returned | ☐ |
| Verbal notice | Explained at purchase, in the language of the sale | ☐ |
| Refund timeline | Within 10 days of cancellation | ☐ |
FAQ (English)
1) Do Sundays count in the 3-day period?
No. Business days are Monday through Saturday. Exclude Sundays and federal holidays.
2) The salesperson said the deal was “final.” Can I still cancel?
If the transaction is covered by the Rule, you can cancel within three business days regardless of any “final” language. The seller cannot waive the right or require a “non-refundable” deposit.
3) I didn’t get a cancellation form. What now?
Send your own written notice before midnight of Day 3 if you can. If the seller never provided the required documents, your right to cancel remains open until they do (and some states extend it further). Keep proof of when/what you sent.
4) Are online purchases covered?
Generally no. The Cooling-Off Rule covers in-person sales away from a permanent store. For online or mail orders, use retailer policies, the FTC’s Mail/Telephone Order Rule, and credit-card dispute rights.
5) What if merchandise was delivered the same day and installed?
You still may cancel if the Rule applies. Keep items safe and make them available for pickup. If installation caused damage, you might owe for unreasonable use, but sellers cannot charge a “restocking” fee just because you canceled timely.
6) How do I prove timely cancellation?
Use certified mail, a tracked courier, or email with timestamp and read receipt (if accepted). The postmark or send time before midnight of Day 3 is critical. Keep copies of everything.
7) Can the seller keep part of my deposit?
No. Timely cancellation requires a full refund, including any down payment or deposit.
8) What if the sale was for home improvement?
Home-improvement contracts signed at your home typically qualify. Many states add extra protections (specific notices, additional cancellation grounds). Check your state’s consumer agency or AG.
9) I traded in equipment. Must they return it?
Yes. Within 10 days of cancellation the seller must return the trade-in or pay its value if return is impossible.
10) The seller won’t refund. What next?
Send a final demand with your cancellation proof. If still no refund, consider a credit-card dispute (if paid by card), complaints to the FTC and your State AG, and, for small amounts, small claims court.
Legal/technical base (English)
- FTC Cooling-Off Rule, 16 C.F.R. Part 429: three-business-day right to cancel certain sales made at a consumer’s home or temporary locations; mandates disclosures, cancellation forms, and refund/return procedures.
- Definitions: “Business day” excludes Sundays and federal holidays; “temporary location” is any place that is not the seller’s permanent business address.
- Exemptions: Low-value thresholds; mail/phone/online sales; real estate/insurance/securities; motor vehicles sold at the seller’s permanent place of business; business/resale purchases.
- Refund & goods handling: Seller must refund within 10 days, return trade-ins/cancel financing; buyer must make goods available for pickup and has no shipping duty absent written instructions.
- Interplay with other laws: State home-solicitation statutes may extend rights; the Fair Credit Billing Act provides credit-card dispute mechanisms if refunds are withheld.
Conclusion
The Cooling-Off Rule is your pressure-relief valve for high-pressure door-to-door and pop-up sales. If the purchase qualifies and you act before midnight of Day 3, you can cancel with no penalty, get your money back, and unwind any financing. Keep your documents, send a provable notice, and use state add-ons and credit-card rights if a seller resists. With a clear timeline and good records, you can turn a hasty “yes” into a smart, risk-free “no.”