The three-day 'Cooling Off' rule

“A salesman came to my house selling magazines, and I signed up for a long-term subscription that I really do not want or need just to get him to leave. Can I cancel the subscription?”


Better Business Bureaus often hear questions like this from consumers who are not sure of their rights regarding cancelling purchases. Under the Federal Trade Commission’s Cooling-Off Rule, consumers have three business days to cancel any purchase of $25 or more that was made in the consumer’s home or somewhere other than the seller’s usual place of business, such as a rented hotel room.

The Cooling-Off Rule also provides protection for consumers who purchase items at a product party given in a private home.

The Cooling-Off Rule does not apply to:

• Sales made at the seller’s usual place of business

• Sales made totally by mail or phone

• Sales for real estate, insurance or securities

• Sales for emergency home repairs

The rule also doesn’t apply to sales that begin as retail transactions at a business establishment, and are completed with the signing of a contract in the consumer’s home.

In cases where the rule does apply, the seller must give the consumer proper cancellation forms along with any contract or receipt pertaining to the sale. The date of the sale should be noted on the cancellation form, which must read in part, “You may cancel this transaction without any penalty or obligation, within three business days from the above date.”

Consumers who decide to cancel the sale should sign and date the cancellation forms, and mail or deliver a copy to the address given for cancellation any time before midnight of the third business day after the date of the contract. Since proof of date is important, the cancellation form should be sent via certified mail with a return receipt requested. There is no need to give a reason for cancellation.

To avoid having to cancel a purchase, the BBB advises consumers to get bids from three different companies, completely read and understand a contract before signing it, never sign a blank contract and never allow a salesperson to pressure them into making a quick decision.


Reach Kelvin Collins, the president/CEO of the Better Business Bureau of Central Georgia and the CSRA Inc., at (800) 763-4222 or

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