In
consumer rights
Consumer protection is the practice of safeguarding buyers of goods and services, and the public, against unfair practices in the marketplace. Consumer protection measures are often established by law. Such laws are intended to prevent business ...
legislation and practice, a cooling-off period is a period of time following a purchase when the purchaser may choose to cancel a purchase, and
return goods which have been supplied, for any reason, and obtain a full refund.
Laws
Many nations have passed laws that create cooling off periods for specific transactions, although the conditions under which they may apply and the transactions covered by the laws varies significantly by jurisdiction. For example, within the United States, the federal government imposes 72-hour cooling down periods for many consumer transactions completed at home or away from the seller's traditional place of business. Many U.S. states impose versions of those cooling down period laws, and offer similar laws for an additional range of transactions, such as time share purchases and health club contracts. For example, California provides cooling-off periods for many consumer transactions, including insurance purchases, car warranties, dental services, and weight-loss services. The
European Union
The European Union (EU) is a supranational political and economic union of member states that are located primarily in Europe. The union has a total area of and an estimated total population of about 447million. The EU has often been de ...
allows residents of member states to seek refunds for goods and services purchased outside of a shop, such as by telephone, mail order or in response to a door-to-door sales pitch, to cancel the transaction, return any purchase and obtain a refund within fourteen days.
Refund policies
Although not technically cooling off periods, many retailers voluntarily grant purchasers a defined period of time during which they may return products that have not been damaged and remain in salable condition.
Some jurisdictions require retailers to offer return policies. For example, in the European Union the
Consumer Rights Directive of 2011 obliges
member states to give purchasers the right to return goods or cancel services purchased from a business away from a normal commercial premises, such as
online
In computer technology and telecommunications, online indicates a state of connectivity and offline indicates a disconnected state. In modern terminology, this usually refers to an Internet connection, but (especially when expressed "on line" o ...
,
mail order
Mail order is the buying of goods or services by mail delivery. The buyer places an order for the desired products with the merchant through some remote methods such as:
* Sending an order form in the mail
* Placing a telephone call
* Placing ...
, or
door-to-door
Door-to-door is a canvassing technique that is generally used for sales, marketing, advertising, evangelism or campaigning, in which the person or persons walk from the door of one house to the door of another, trying to sell or advertise a pro ...
, with limited exceptions, within two weeks or one year if the seller did not clearly inform the purchaser of their rights from the receipt of the goods, for a full refund. The Consumer Rights Directive is implemented in the
United Kingdom
The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the European mainland, continental mainland. It comprises England, Scotlan ...
by the Consumer Contracts (information, Cancellation and Additional Charges) Regulations 2013.
Experimental economics
The effects of cooling-off periods have been studied in
experimental economics
Experimental economics is the application of experimental methods to study economic questions. Data collected in experiments are used to estimate effect size, test the validity of economic theories, and illuminate market mechanisms. Economic expe ...
in the context of the so-called
ultimatum game
The ultimatum game is a game that has become a popular instrument of economic experiments. An early description is by Nobel laureate John Harsanyi in 1961. One player, the proposer, is endowed with a sum of money. The proposer is tasked with s ...
. In this game, one party makes an offer to divide a pie (say, 10 dollars). Then another party can accept or reject the offer. When the offer (say, 8 dollars for the first party and 2 dollars for the second party) is accepted, the parties get the respective payments. When the offer is rejected, both parties get zero. Cooling-off periods can reduce the rejection rates of unfair offers when the parties perceive the stakes to be large.
See also
*
Buyer's remorse
Buyer's remorse is the sense of regret after having made a purchase. It is frequently associated with the purchase of an expensive item such as a vehicle or real estate.
Buyer's remorse is thought to stem from cognitive dissonance, specifically ...
*
Consumer protection
References
Consumer protection law
Product return
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