If you have never heard of impulse buying, you may not be living in the U.S., with its hunger for possessions and constant push to buy, buy, buy. Newspapers, magazines, television and radio are over-sprinkled with advertising blaring about the wonder of various products or services. With the digital age upon us, consumers face the same deluge on smartphones and internet-connected computers. Even the exterior of public buses are covered with colorful ads.
When your ears and eyes are filled with advertising, it's easy to reach for the credit card and carry home something – a possession or a service contract – that you don't need or can't afford. That's where California's 72-hour right-of-rescission comes in, the law giving you a three-day cooling off period in California for any purchase or service, right? Wrong, unfortunately. You had better learn the ins and outs of the "buyer's remorse laws" in California before you try to return your bag of goodies.
Buyer's Remorse Law
Buyer's remorse laws can be a real help to consumers. What is a buyer's remorse law? It's a law giving consumers the right to cancel contracts or return goods for any reason or no reason during a given number of days after purchase. Obviously, if new products are defective or services are not as described, a consumer can return them in almost all situations. But if it's just a question of impulse buying, signing on the dotted line without thinking the whole matter through and later regretting it, buyer's remorse laws can be a lifeline. If a purchase of a product or a service is covered by a buyer's remorse law, you can return the merchandise or cancel the contract without paying any sort of fee, as long as you act within the period set out in the statute.
However, not all state laws are the same. Although buyer's remorse looks similar (think glum face, ache in the stomach) from Provincetown, Massachusetts, to Portland, Oregon, there is no generic formula for building a buyer's remorse law. The laws are introduced and passed in the state legislature and then must be signed by the governor to become state statutes, and, as a result, the terms and protections of state buyer's remorse laws differ. While California is considered a liberal state with consumer-friendly laws, its buyer's remorse laws may not provide as much protection as you imagine.
Three-Day Cooling-Off Period in California
In California, buyer's remorse laws give consumers the right to cancel some types of purchases in certain instances. But unlike the popular myth, there is absolutely no general, three-day, cooling-off period in California law. You buy an expensive item in a luxury goods store today, your rights to return it tomorrow probably depend on the posted policies of the store you frequented.
So, what is the buyer's remorse law in California? It's the term given to the legal provisions in the law allowing California consumers to cancel contracts under certain circumstances. Let's be absolutely clear on one point: the state codes do not provide for a three-day cooling-off period in California in which you are allowed to return whatever it was you bought or cancel any service you signed up for without paying anything, no questions asked.
Rather, California laws allow a consumer to cancel certain contracts for any reason, even simply second thoughts. But the law does not apply to all contracts or even most contracts. And the "cooling-off" period for covered contracts is not a uniform 72 hours (or the mythical three days). Time periods vary. Outside of the buyer's remorse law, your rights to cancel a contract in California may be governed by the FTC "Cooling-Off Period" rule. If not, they are governed by contract law and company policy.
Car Purchases Under California Buyer's Remorse Laws
Contracts specified under California buyer's remorse laws can be cancelled for any reason. But in some cases, you have to pay to get the right to that cooling-off period. Here are some of the contracts that are classified as relevant to the buyer's remorse laws in California.
Buying a car in California? Do not travel under the assumption that you have an automatic three-day cooling off period for automobile purchases. The only type of auto contracts covered by the state's buyer's remorse laws are used cars purchased from dealers. And, the law doesn't automatically allow you to return the car. It only mandates that, in a contract to purchase a used car, the dealer must offer the buyer the chance to pay extra to buy a cooling-off period of two days. Note that this is required only for used cars, not new cars, and it applies only to cars costing less than $40,000. Does it apply to business vehicles? No. Motorcycles? No. Not to RV sales either, or sales between private individuals.
The price you pay for this two-day cooling off period protection is also regulated. The cost runs from $175 to $500, depending on the price of the car you are buying. If you go ahead and buy the protection and decide to cancel, you have to return the car to the same dealership you bought it from within two business days of the purchase without having exceeded the mileage limits in the contract. The car must be in essentially the same condition as when purchased, and you have to have all of the paperwork. In exchange, the dealer has to give you everything back, from the sales price to the registration fees.
Car warranties are another animal altogether. You can cancel a warranty you bought for a new car within 60 days. Used car warranties can be cancelled within 30 days.
Financial and Home Contracts Covered
You can also cancel a number of financial, insurance and home-related contracts under California buyer's remorse laws. These are very specific and offer differing amounts of time to cancel. This time can be three days, five days, 30 days or an indefinite amount of time. Those that are three days offer this protection:
- the right to cancel a home loan
- the right to cancel a home improvement contract: three business days if the repair or renovation contract allows a mechanic's lien to be filed
- the right to cancel any deal in which you use your home as security, so that it can be seized or sold if you don't pay
- the right to cancel a contract with an electric services providor
- the right to cancel a dental services contract
- the right to cancel a discount buying services arrangement
- the right to cancel a contract for immigration help services
- the right to cancel a contract for a device that treats water
- the right to cancel a contract listing jobs available
- the right to cancel a contract for weight loss assistance or services
- the right to cancel a real estate contract if the Transfer Disclosure Statement isn't produced on time or has been significantly amended: three business days if personally delivered, five business days if mailed
Goods or services with a five-day cooling off period include:
- a home equity sales contract during foreclosure: five business days
- a gym membership or health club membership: five business days
Contracts you have 30 days or more to cancel include:
- a disability insurance policy: 30 days
- repair services for appliances or electronics: 30 days
- property insurance policy: at any time
- dance studio services contract: at any time
- funeral contract: at any time before you need it
FTC’s Cooling-Off Rule
The Federal Trade Commission laws apply across the nation, and that includes California. The FTC's "Cooling-Off Rule" can give you more protection than state laws in some areas, providing a three-day right to cancel after you buy. It applies to sales that take place in certain places, like your home, office or school dorm. It also applies to purchases at a seller's temporary location, for instance, when a seller is operating out of a hotel room, a convention center booth or a restaurant. Not every sale is covered, so look out for exceptions.
If you decide to buy from someone selling merchandise at one of these locations, the seller has a legal obligation to tell you – at the time of purchase – about your right to cancel. The seller also has an obligation to give you two separate copies of a three-day notice of cancellation form, one to use if you decide to cancel and the other for your records. You also should get a dated copy of your contract or receipt that has the seller's name and address on it. That contract or receipt must also set out your right to cancel. When does the right to cancel expire? As the clock strikes midnight on the third business day after the purchase.
Here come the exceptions, so take note. These sales cannot be cancelled under the FTC rule.
- sales that are made at your home for under $25 or made at a company's temporary locations for under $130
- purchases of any goods or services that are not for personal, family or household purposes
- any sales that take place entirely without personal contact, such as those on the internet, by mail or phone
- any sales that were negotiated at the seller's store or normal place of business
- sales that were part and parcel of a request you made for the seller to "repair your personal property."
How to Cancel Under FTC Rules
If you decide to cancel a purchase under the FTC Cooling Off Rule, you don't have to explain. No need to come up with an extravagant excuse for deciding against keeping the item or service. All you have to do is to say that you changed your mind.It's not a complex matter to cancel a sale, as long as you do it within the period. All you have to do is sign and date a copy of the cancellation form that the seller provided. Put the form in an envelope and mail it to the address provided on the form. Don't just mail it, take it to the post office and be sure it gets a postmark. You'll want to be sure that the envelope is postmarked before midnight of the third business day after the contract date. Be sure you understand how to count business days. Saturday is a business day for FTC purposes, but Sunday is not, nor are federal holidays. You may want to use certified mail, so you get a return receipt.After you send in the form, the seller must return any check you signed, refund all your money, return any trade-in you gave and let you know if it will pick up the product from you. The seller has 20 days to pick up the items or arrange to pay for their mailing costs. Remember, the merchandise must be in the same condition it was when you bought it.
Teo Spengler earned a J.D. from U.C. Berkeley's Boalt Hall. As an Assistant Attorney General in Juneau, she practiced before the Alaska Supreme Court and the U.S. Supreme Court before opening a plaintiff's personal injury practice in San Francisco. She holds both an M.A. and an M.F.A in creative writing and enjoys writing legal blogs and articles. Her work has appeared in numerous online publications including USA Today, Legal Zoom, eHow Business, Livestrong, SF Gate, Go Banking Rates, Arizona Central, Houston Chronicle, Navy Federal Credit Union, Pearson, Quicken.com, TurboTax.com, and numerous attorney websites. Spengler splits her time between the French Basque Country and Northern California.