FTC Cooling-Off Rule: When a Door-to-Door Sale Can Be Undone

If your salespeople close deals at a customer's kitchen table, in a hotel ballroom or at a booth at the county fair, a federal rule gives those customers a way out that an online buyer does not have. The FTC's Rule Concerning Cooling-Off Period for Sales Made at Homes or at Certain Other Locations, usually called the Cooling-Off Rule, lets a buyer cancel a covered sale for any reason until midnight of the third business day after it. It also sets what paperwork you must hand over, what you must say out loud and how fast the money has to go back.

Solar installers, home security and alarm companies, water treatment dealers, pest control and roofing crews, vacuum and cookware sellers, and businesses selling courses or memberships at seminars often sell in settings this rule covers. That matters to their payment accounts too, because a cancellation that is handled badly becomes a chargeback. This guide covers what the rule requires as of November 2026, with the text taken from the Electronic Code of Federal Regulations (16 CFR Part 429), and how it meets Visa's rules from the Visa Core Rules and Visa Product and Service Rules dated 24 October 2026. It is general information, not legal advice.

Which sales the rule covers

The rule calls a covered transaction a door-to-door sale, but the definition is much wider than knocking on doors. It covers a sale, lease or rental of consumer goods or services where the seller or its representative personally solicits the sale and the buyer agrees to buy somewhere other than the seller's place of business. That includes a visit the buyer asked for. The rule's own examples are the buyer's home, facilities rented on a temporary or short-term basis such as hotel or motel rooms, convention centers, fairgrounds and restaurants, the buyer's workplace and dormitory lounges.

Two price thresholds apply, and they depend on where the sale is made:

• At the buyer's residence: a purchase price of $25 or more.
• Anywhere else that qualifies, such as a hotel seminar or a fair booth: a purchase price of $130 or more.

The purchase price is the total paid or to be paid, including all interest and service charges, and it counts whether the sale is written up as one contract or several. The FTC raised the threshold for sales away from the home from $25 to $130 in an amendment that took effect on March 13, 2015. The $25 threshold for sales at the home did not change.

Consumer goods or services means things bought, leased or rented mainly for personal, family or household use. The definition adds one category that surprises seminar sellers: courses of instruction or training are covered regardless of why the buyer takes them. A business coaching or trading course sold at a hotel event is not exempt just because the buyer means to use it for work.

What the rule does not cover

The definition excludes a transaction that is:

• Made after prior negotiations during the buyer's visit to a retail business with a fixed permanent location where the goods or services are offered for sale on a continuing basis.
• One where the buyer already has a right of rescission under the Consumer Credit Protection Act, the right that applies to certain credit secured by the buyer's home.
• Started by the buyer to meet a bona fide immediate personal emergency, where the buyer gives the seller a separate, dated and signed statement in the buyer's own handwriting that describes the emergency and expressly waives the right to cancel within 3 business days.
• Conducted and completed entirely by mail or telephone, with no other contact between buyer and seller before delivery or performance.
• Started by the buyer, who asked the seller to visit the home to repair or maintain the buyer's personal property. Anything sold during that visit beyond the replacement parts needed for the repair is covered again.
• A sale or rental of real property, a sale of insurance, or a sale of securities or commodities by a broker-dealer registered with the SEC.

Two narrower exemptions sit in a separate section: sellers of cars, vans, trucks and other motor vehicles at auctions, tent sales or other temporary locations, as long as the seller has a permanent place of business, and sellers of arts or crafts at fairs or similar places.

The handwritten emergency waiver is the only way a buyer gives up the right, and it has to come from the buyer. A pre-printed waiver in your contract is itself a violation, as the next section explains.

What you must do at the point of sale

The rule lists what a seller must do when the buyer signs. Failing to do any of it is an unfair and deceptive act or practice.

• Hand over a fully completed receipt or copy of the contract when it is signed. It must be in the same language as the one mainly used in the oral sales presentation, show the date of the transaction and the seller's name and address, and carry a cancellation statement in bold type of at least 10 points, next to the buyer's signature space (or on the front page of a receipt if there is no contract).
• Give the buyer a completed Notice of Cancellation form in duplicate, captioned either "NOTICE OF RIGHT TO CANCEL" or "NOTICE OF CANCELLATION", in 10-point bold type and in the same language as the contract. The rule sets out the form the notice must substantially follow, including the refund and return terms below.
• Fill in both copies before handing them over: the seller's name, the address of its place of business, the date of the transaction, and the cancellation deadline, which cannot be earlier than the third business day after the sale.
• Tell the buyer orally, when they sign, that they have the right to cancel.
• Never misrepresent the right to cancel in any way.
• Never put a confession of judgment, or a waiver of any right under the rule, in the contract or receipt.

Business day has a specific meaning here. The rule counts every calendar day except Sundays and federal holidays, so Saturday is a business day. The FTC's consumer guidance gives the example that a sale on a Monday can generally be cancelled until midnight on Thursday, and a sale on a Friday until midnight on the following Tuesday, with a federal holiday pushing the deadline back a day. A contract that computes the deadline in calendar days, or skips Saturdays, gives the buyer the wrong date.

A tablet contract does not change any of this. The rule requires a completed copy and a duplicate cancellation form at the time of signing, and the buyer must be able to keep a complete copy of the contract if they cancel. If you use electronic signing, make sure the buyer leaves with every document the rule requires.

When a buyer cancels

The buyer cancels by mailing or delivering a signed and dated copy of the cancellation notice, or any other written notice, to the address on the form by midnight of the deadline. The FTC's consumer guidance tells buyers that a mailed notice must be postmarked by the deadline and that a buyer who never received the forms can write their own letter. No reason is needed.

Once you receive a valid notice, you have 10 business days to:

• Refund all payments made under the contract or sale.
• Return any goods or property traded in, in substantially as good condition as when you received them.
• Cancel and return any negotiable instrument the buyer signed, and take whatever action is needed to end any security interest created in the sale promptly.
• Tell the buyer whether you intend to collect or abandon any goods you have already delivered.

The buyer's side of the bargain is also set by the rule. They must make the goods available at their residence in substantially as good condition as when received, or follow your instructions for shipping them back at your expense and risk. If they make the goods available and you do not pick them up within 20 days of the date of their notice, they may keep or dispose of them with no further obligation.

For financed sales there is one more limit. You may not negotiate, transfer, sell or assign a note or other evidence of the buyer's debt to a finance company or other third party before midnight of the fifth business day after the contract was signed.

State law can add to this

The rule does not override state or local door-to-door sales laws, except where they are directly inconsistent with it. A state law is treated as inconsistent if it gives the buyer a right to cancel that is less than the rule's, lets the seller charge a fee or penalty for cancelling, or does not require a notice in substantially the rule's form. A law that gives the buyer more protection stands. The FTC's consumer guidance notes that some state laws give buyers more rights than the federal rule, so check the law in every state where you sell before you finalize your contract.

Penalties

The Cooling-Off Rule is an FTC trade regulation rule, so violations can carry civil penalties. The maximum under Section 5(m)(1)(A) of the FTC Act is $53,088 per violation. That is the 2025 figure, which the FTC announced on September 15, 2026 would stay in place during 2026.

How the Cooling-Off Rule meets card network rules

Many door-to-door and event sellers take cards on a mobile reader or a virtual terminal at the table. That puts every cancellation inside Visa's dispute system as well as the FTC's rule, and the two need to agree.

Disclosing your cancellation policy

Visa lets a merchant set its own refund policy, but if it restricts returns or cancellations it must disclose its return, refund and cancellation policies clearly. For a card-present transaction, the disclosure must be made at the point of transaction before the cardholder completes it, or on the front of the receipt. If it is on the receipt or in a separate contract, it must come with a space for the cardholder to show they accept it. Visa also says a merchant must not require a cardholder to waive the right to dispute a transaction with the issuer.

For a door-to-door seller this means your contract has to do two jobs. It must carry the Cooling-Off Rule's statement and notice, and if your policy limits cancellation after the three business days, it must disclose that policy with a place for the buyer to accept it. A policy that tries to limit cancellation inside the three-day window conflicts with the rule's ban on waivers. Our guide to no-refund policies covers what the card networks allow more generally.

The cancellation dispute

When a buyer says they cancelled and you did not refund, the dispute usually comes under Visa Dispute Condition 13.7, Cancelled Merchandise/Services. An issuer can use it when the cardholder cancelled or returned merchandise or cancelled services, the merchant did not process a credit, and the merchant either did not properly disclose, or disclosed but did not apply, a limited return or cancellation policy at the time of the transaction.

• Timing. The issuer must generally wait 15 calendar days from the date the merchandise was returned or the merchandise or services were cancelled. The waiting period does not apply if the merchant refuses to accept the cancellation or the return, or refuses to issue a credit. The dispute must be processed within 120 calendar days of the transaction processing date or of the date the cardholder received or expected to receive the goods or services, up to 540 days after processing.
• Returns. If merchandise was shipped before the cancellation, the cardholder must return it if they received it. The dispute applies if you refuse the return.
• Amount. The dispute is limited to the value of the returned merchandise or the unused portion of the cancelled service.

Visa's response requirements for 13.7 include the receipt or other record proving you properly disclosed a limited return or cancellation policy at the time of the transaction, and evidence that the cardholder received that policy and did not cancel according to it. For card-present transactions where the dispute is about cancelled services or merchandise cancelled before receipt, Visa also accepts certification that the cardholder received the services or took the merchandise at the time of the sale. A refund you already issued that the issuer did not address is also a valid response.

The paperwork the Cooling-Off Rule requires is the same paperwork that answers a 13.7 dispute. A signed contract with the cancellation statement, a dated cancellation deadline and a disclosed policy for cancellations after that deadline, kept for every sale, is your evidence. A buyer who cancelled on time and is still waiting for a refund past your 10 business days is a dispute you are unlikely to win, and a legal violation on top. Our guides to Visa chargeback reason codes and chargeback time limits cover the wider dispute process.

When you can charge the card

Visa does not let a merchant deposit a transaction until the transaction is completed, the merchandise or services are shipped or provided, or, for installment, recurring and some stored-credential transactions, the merchant has met the conditions of its agreement with the cardholder. Taking the full price before delivery is an advance payment, and Visa limits it to certain merchant categories: travel and entertainment, custom goods or services, face-to-face sales where some items are not immediately available and will be shipped or provided later, and recreational services related to tourism and travel. In each case the terms and conditions must specify the date the goods or services will be shipped or provided to the cardholder.

A seller who takes a full payment at the kitchen table for an installation weeks away is taking an advance payment. Confirm with your processor whether your sales fit one of those categories and how it expects you to handle deposits. Some sellers sidestep the question by taking a smaller deposit, or by charging only after the cancellation deadline has passed. Either way, any money you take during the window must come back within 10 business days if the buyer cancels.

A compliance checklist for in-home and event sellers

1. Work out which of your sales are covered: every sale at a buyer's home of $25 or more, and every qualifying sale away from your place of business of $130 or more, counting interest and service charges.
2. Put the bold, 10-point cancellation statement next to the buyer's signature line, and attach a Notice of Cancellation in duplicate with the rule's wording.
3. Fill in the seller name, business address, sale date and cancellation deadline on both copies before handing them over, and calculate the deadline in business days, counting Saturdays.
4. Use the language of the sales pitch. If the presentation was in Spanish, the contract and notices must be in Spanish.
5. Train every representative to explain the right to cancel out loud at signing, and never to play it down.
6. Remove any waiver or confession of judgment from your contract. Accept the emergency waiver only in the buyer's own handwriting, on a buyer-started emergency.
7. Set up a cancellation process that refunds the card, returns trade-ins and voids any note within 10 business days, and tells the buyer within the same 10 business days whether you will collect the goods.
8. Hold financed paper until after midnight of the fifth business day.
9. Disclose any limited cancellation policy that applies after the three business days, on the contract, with a space for the buyer's acceptance.
10. Keep the signed contract, the notice, the cancellation date and the refund record for every sale. They are your evidence in a 13.7 dispute.
11. Check the door-to-door sales laws of every state you sell in.

Cancellation disputes are the main payment risk in this kind of selling, and a business that drags out refunds can produce them in batches. A file that shows compliant contracts, a working cancellation process and clean refund records gives an underwriter a clear answer. If your business sells in homes or at events and needs a merchant account that understands how it works, talk to a PayKings specialist.