It begins innocently enough. You tell yourself you're not really in the market for a widget right now, but you listen to the sales pitch anyway. The more the guy talks, the more sense he makes. And pretty soon that widget's looking better and better—in fact, it's looking great. The next thing you know you're the proud owner of a brand-new widget—and not just your run-of-the-mill basic widget but the super-deluxe model with the glow-in-the-dark monogram.

In time, of course, you come to your senses. You realize that, while there are things you need in this life, a glowing widget isn't one of them. And you wonder, Am I really stuck with this thing? Well, whether you are or whether you are not, one thing is certain: You have buyer's remorse and you have it bad.

In some instances, a case of buyer's remorse can be easy to cure. If you're not happy with merchandise you've purchased at a store or from a mail-order company, for example, you usually can return it without much problem. In other situations, however, the solution may not be so simple. And that's why the Federal Trade Commission's (FTC) Cooling-Off Rule was enacted.

The Cooling-Off Rule gives you the right to cancel a purchase within three days and receive a full refund from the seller. Although it's a genuinely consumer-friendly piece of legislation, the rule is definitely not a cure-all for every case of buyer's remorse. For one thing, it only covers you if you make the purchase in your home or at some other location that's not the seller's permanent place of business. And that's only one of its many exceptions and limits.

But what the Cooling-Off Rule can do is to protect you in situations where protection otherwise might be lacking. The following FAQs (frequently asked questions) will help you get a clearer idea of what the rule can and cannot do, and whether you indeed will be stuck with that widget.
    Some states
    are considering
    tough new laws that
    go well beyond the
    provisions of
    the federal
    Cooling-Off Rule.

What is the purpose of the Cooling-Off Rule?
The Cooling-Off Rule—officially known as the Rule Concerning the Cooling-Off Period for Sales Made at Homes or Certain Other Locations—was enacted in 1972 to give consumers protection against the sales tactics of door-to-door salespeople. As its name suggests, the rule gives you a brief period of time during which you can "cool off" and decide whether or not to keep the merchandise you've purchased. Basically, if you change your mind after buying something in your home or at another location that isn't the seller's permanent place of business, you have the right to cancel the purchase within three business days, return the item, and receive a full refund.

Does the rule apply only to purchases made at home?
No. The rule certainly does apply to purchases made at your home or workplace—and "home" can mean a house, an apartment, or even a dormitory room. But it also applies to purchases you make at another location if the location is not the seller's permanent place of business. For example, if you buy something in the seller's hotel room, at a booth at a convention or fair, or in a restaurant, you still may be protected by the Cooling-Off Rule.

What transactions are not covered?
Even if you make the purchase at home or at another location away from the seller's permanent place of business, the Cooling-Off Rule may not cover it. You won't have the right to cancel the transaction if:
  • The purchase amount is less than $25.00.
  • You negotiated the sale earlier at the seller's permanent place of business where the product is sold regularly.
  • You purchase the product or service to meet an emergency.
  • You purchase the product when requesting the seller to make repairs or do maintenance on your property.

Are all products and services covered by the rule, or are some excluded?
The rule doesn't cover the sale of certain types of products and services. Under this rule, you cannot cancel transactions in which you purchase:
  • Real estate, insurance, or securities.
  • Cars, vans, trucks, or other motor vehicles sold at temporary locations if the seller has a permanent place of business.
  • Arts and crafts sold at fairs, shopping malls, and other temporary locations.
In addition, you have the right to rescind mortgage and other credit transactions under other rules.

Does the rule cover purchases made by telephone, by mail, or on the Internet?
No. However, check with your state and local consumer protection offices. Some states are considering tough new laws that go well beyond the provisions of the federal Cooling-Off Rule. In 1999, for example, the state of Wisconsin enacted a consumer protection law that extends the cooling-off period to telemarketing, e-mail, and junk mail solicitations.

How do you inform the seller that you're canceling the purchase?
The seller should provide everything you need. When you make the purchase, the salesperson is required to give you two copies of a cancellation form along with a copy of your receipt and contract, and to inform you of your right to cancel the transaction. If you do decide to cancel it, you simply sign and date one copy of the cancellation form and mail it to the address shown on the form. Of course, be sure to keep the other copy of the form for your own records. If the seller fails to provide a cancellation form, you can write your own cancellation letter instead.

Remember that the cooling-off period lasts only three days. Your cancellation letter must be post-marked by midnight of the third business day after the purchase date. You may want to send the letter by certified mail so you can get a receipt confirming delivery.
    The rule applies
    to purchases made
    at your home or
    "home" can mean
    a house,
    or dorm room.

Does the rule require you to give a reason for canceling the purchase?
No. You don't have to explain why you've changed your mind.

What are the seller's obligations if you cancel the purchase?
The seller has ten days to refund your money and tell you whether you should mail the merchandise back or wait to have it picked up. Within 20 days, the seller must pick up the merchandise or reimburse you for mailing expenses if you agreed to mail it.

Where can I get more information and assistance?
For more information about the Cooling-Off Rule, call the FTC's Consumer Response Center toll-free at 877-FTC-HELP (877-382-4357) or visit the FTC's Web site. Also, be sure to contact your state and local consumer protection offices. They can tell you about any other consumer protection laws that may apply to you, and they may be able to help you resolve any disputes you're having with a seller.

© 2000 Credit Union National Association Inc.