South Carolina Legal Services > Blog > Uncategorized > When and How to Use the Three-Day Right To Cancel

When and How to Use the Three-Day Right To Cancel

People often think they have 3 days to change their mind on any purchase. It’s often called the right to cancel or the right of rescission. We think of it as buyer’s remorse.  The Federal Trade Commission (FTC)  regulations refer to it as the cooling off rule.

This especially comes up in car sales. Many states just like South Carolina do have laws that will give the buyer the right to cancel on certain types of purchase contracts but it’s very limited. The one most often misunderstood is the car sale. The three day right to cancel does not exist in the purchase of a car or other vehicle. The rule exists because consumers will sometimes get caught up in a persuasive sales pitch and make a purchase they later regret. 

Under South Carolina law there are specific, though limited, circumstances where the right to cancel arises: door to door sales, sale of a health club or gym membership, refinance of a home mortgage and the purchase of a vacation timeshare unit. Let’s take a closer look at these.

  1. Any kind of service or product that was sold to you at your home by someone coming to your door and selling it to you is subject to your right to cancel the purchase.  You’re entitled to a full refund if you notify the seller that you are cancelling the sale within three business days. But that doesn’t apply when you bought the item in the store or online and it’s delivered to your home. That is not considered a door to door sale. Likewise, if you go to the premises of the business and you buy it from them there and they are going to deliver it to your house that is not a door to door sale and the right to cancel within three days doesn’t apply.
  2. Gym and health club memberships sold in South Carolina are subject to a three day right to cancel. That right of cancellation applies no matter where the transaction purchasing the membership takes place.
  3. If you refinance a mortgage on your primary residence you have a three day right of cancellation. That doesn’t include a second home or commercial property.
  4. Finally, in South Carolina the purchase of vacation timeshare units are subject to an even longer right to cancel of five days.

The FTC cooling off rule which is essentially the same, provides the three day right to cancel a sale that’s made at your home, your workplace, a dormitory, or a temporary location. Keep that in mind if you go to a sale in a hotel or motel room, convention center, fairground and so on, you do have the right to cancel sales at those type locations. Certain types of sales can’t be canceled, even if they take place in places normally covered by the Rule. The Cooling-Off Rule does not cover sales that are:

  • under $25 for sales made at your home;
  • under $130 for sales made at temporary locations;
  • for goods or services not primarily intended for personal, family or household purposes. (The Rule applies to courses of instruction or training.);
  • made entirely online, or by mail or telephone;
  • the result of prior negotiations at the seller’s permanent place of business where the goods are sold regularly;
  • needed to meet an emergency;
  • made as part of your request for the seller to do repairs or maintenance on your personal property (purchases made beyond the maintenance or repair request are covered).

Also exempt from the Cooling-Off Rule are sales that involve:

  • real estate, insurance, or securities;
  • automobiles, vans, trucks, or other motor vehicles sold at temporary locations if the seller has at least one permanent place of business;
  • arts or crafts sold at fairs or places like shopping malls, civic centers, and schools.

How do you cancel?

You don’t need to have a reason for cancelling. You have the right to change your mind.

To cancel the sale, you just need to sign and date one copy of a cancellation form that should have been given to you at the time of the sale. But if they didn’t give you a form you can just write a cancellation letter. The notice needs to be mailed to the seller and postmarked within three business days of the sale. That means weekdays and Saturdays but, not Sundays and federal holidays.

If you cancel the purchase, that seller has 10 days to cancel and return any check you signed, refund all your money and tell you whether any of the products that you still have will be picked up and return any trade-in that you may have provided in a particular sale.

Within twenty days the seller must either pick up any items you have or reimburse you for mailing expenses if you agree to send the items back by mail.

If you did receive the actual goods from the seller before you did the cancellation, you do have to make them available to the seller in as good a condition as when you got them.

If you think a seller has violated the FTC’s cooling off rule, you can file a complaint at consumer.ftc.gov and here in South Carolina you can file a complaint for violations of state law with our S.C. Department of Consumer Affairs and that is at consumer.sc.gov.

Leave a Reply

Your email address will not be published.