The FTC Cooling-Off Rule: 3 business days to cancel

Holiday season brings more pop-up sellers, home demos and expo booths with a "today only" price. If you sign under pressure, a federal rule may give you three business days to change your mind.

Key takeaways

The rule covers sales of $25 or more at your home and $130 or more at temporary locations such as hotel rooms, convention centers, fairgrounds and restaurants.
You can cancel until midnight of the third business day after the sale.
The seller must give you a receipt or contract with the cancellation statement plus two copies of a Notice of Cancellation form, and must tell you about the right orally.
After a valid cancellation, the seller has 10 business days to refund your payments and return any trade-in.

Which sales are covered

Under 16 CFR 429.0, definitions (Cooling-Off Rule), a door-to-door sale is one where the seller personally solicits and your agreement is made somewhere other than the seller's place of business. Examples include your residence, your workplace and "facilities rented on a temporary or short-term basis, such as hotel or motel rooms, convention centers, fairgrounds and restaurants." The price threshold is "$25 or more if the sale is made at the buyer's residence" or "$130 or more if the sale is made at locations other than the buyer's residence."

What the seller must give you

16 CFR 429.1, the Cooling-Off Rule requires a completed receipt or contract with a statement that you "may cancel this transaction at any time prior to midnight of the third business day after the date of this transaction." It must come with a "NOTICE OF CANCELLATION" form in duplicate, in the same language as the sales pitch. The seller must also "inform each buyer orally" of the right to cancel and may not misrepresent it.

After you cancel

Within 10 business days, the seller must refund all payments, return any trade-in and cancel any negotiable instrument you signed.
You must make delivered goods available at your home in about the same condition. If the seller doesn't pick them up within 20 days of your notice, you may keep or dispose of them with no further obligation.
The seller can't sell your note to a finance company before midnight of the fifth business day after the sale.

Common exceptions

The rule doesn't cover a sale made after prior negotiations at the seller's permanent retail store, certain bona fide emergencies where you started the contact and waive the right in writing, and some others listed in 16 CFR 429.0, definitions (Cooling-Off Rule). 16 CFR 429.3, exemptions also exempts motor vehicles sold at temporary locations by dealers with a permanent place of business, and "arts or crafts sold at fairs or similar places."

How to cancel

Sign and date one copy of the Notice of Cancellation (or write your own notice).
Mail or deliver it to the address on the form before midnight of the deadline. Keep the other copy and proof of mailing.
If you got no notice form at all, that's a violation; put your cancellation in writing anyway and keep records.

General consumer information, not legal advice. State laws may give more rights. Sources: 16 CFR 429.0, definitions (Cooling-Off Rule); 16 CFR 429.1, the Cooling-Off Rule; 16 CFR 429.3, exemptions.

Published October 31, 2026. We do not use affiliate links on this page; see our Affiliate Disclosure.