Ken Paxton

The 3-Day Right to Cancel a Purchase

Many consumers are under the impression that they have a 3-day right to cancel any and all consumer purchases. However, this is not true. The right to cancel law applies only to very specific situations.

The 3-day right to cancel law applies to sales made at facilities other than the seller's place of business. Such locations may be the consumer's residence and places rented on a temporary or short-term basis, such as hotel rooms or convention centers.

A "home solicitation transaction" takes place whenever a consumer purchases goods or services for more than $25 payable in cash or installments at a place other than the seller's place of business. The place other than the seller's place of business may be the consumer's home, but it may also be a place that the merchant has rented on a temporary basis, such as a hotel room or convention center.

Door-to-door sales laws do not apply to certain transactions, such as:

  • Sales of insurance and farm equipment;
  • Real estate purchases under $100;
  • A sale where an attorney or broker assists in the transaction;
  • Sales made pursuant to prior negotiations at the merchant's business establishment, where the sale is the result of those negotiations; and
  • Sales conducted entirely by mail or telephone, with no other contact between the buyer and seller.

Under Texas law, the door-to-door seller must advise you orally and in writing that you have a right to cancel the sale within three days. He or she must also give you a contract or receipt stating the date of the sale, the name and address of the merchant, and a statement of your right to cancel the contract which includes the address where you send your cancellation notice.

The contract or receipt and the notice of your right to cancel must be in the same language as that principally used in the sales presentation. For example, if the buyer and the salesperson spoke in Spanish during the sale, the contract must be in Spanish.


Canceling a Sale

If the salesperson provided you with the right forms, to cancel the sale you may simply sign the one titled "notice of cancellation," date it, and mail it back to the seller. To obtain a full refund, you must do this before midnight of the third business day after the sale. Keep a copy of the form.

If the salesperson did not provide a cancellation form, you may still cancel your contract. Because the seller violated the law by not providing the form, you have extra time. But remember, you must cancel in writing. Be sure to keep a copy of the contract and your letter notifying the seller of the cancellation. Of course, the sooner you do this, the better.

After you cancel, the seller has ten business days to refund your money, return any note you may have signed concerning the sale, and return any trade-in items. The seller of the goods must notify you within ten days whether he or she intends to retrieve the goods or abandon them. He or she may not require you to mail or ship the goods back.

If the seller fails to notify you of his or her intention to repossess the goods within twenty days after cancellation, you may not be forced to return the goods at a later date. You are not obligated to return goods to the seller until you have recovered either your money or your agreement to pay money. The seller must restore your property to its original condition if any "improvements" were made to it and you want it restored.