Do Consumers Have the Right to Cancel a Credit Card Purchase Within 72 Hours?

by Stephen Bush
The rules for canceling credit card purchases are different from other financial transactions.

Consumers frequently assume that they have three days to cancel any purchase, but the 72-hour Cooling-Off Rule applies only to specific purchase situations. However, this regulation does not usually involve credit card transactions. Consumers who want to cancel a credit card purchase should review merchant cancellation and return policies. If this approach is unsuccessful in resolving a problem, credit card companies will often be willing to help with disputed transactions.

Cooling-Off Rule

The Federal Trade Commission has adopted the Cooling-Off Rule to protect consumers in many purchase transactions. With this legal protection, buyers are permitted to cancel qualified purchases of $25 or more within 72 hours. However, this rule applies primarily to in-home purchases and other transactions that occur away from a merchant’s primary business location. Salespeople covered by this regulation are required to notify buyers of their cancellation rights and provide documents needed to cancel a transaction. This rule does not apply to most credit card transactions. However, the Cooling-Off Rule might help in limited circumstances depending on the amount and location of purchase.

Merchant Cancellation Policies

Businesses will typically have a standard cancellation policy that might allow consumers to cancel a purchase. However, some merchants have a strict standard of restricting or not allowing cancellations. Regardless of the merchant policy, buyers should make an earnest attempt to deal directly with a business about canceling a purchase. Unless the FTC’s Cooling-off Rule or a specific state law applies, a merchant might not be legally required to cancel a valid purchase.

Return Merchandise for Refund

Once goods are delivered or shipped by a merchant, buyers should determine what is required for returning merchandise and receiving a refund. Unless the product is damaged or is not as advertised, a business is often not under any legal obligation to issue a refund for returned merchandise. However, consumers might succeed in receiving a refund by communicating directly with the business owner or senior manager.

Credit Card Companies Might Help

Under the Fair Credit Billing Act, consumers have the right to stop payment for damaged and low-quality merchandise. This protection applies only to purchases above $50, within the state of residence or within 100 miles of a buyer’s home. However, many credit card companies will permit buyers to dispute purchases outside of these guidelines. Some credit card issuers routinely presume that their customers are right and issue temporary credits until a dispute is resolved. With the legal protection provided by the Fair Credit Billing Act, consumers can frequently withhold payment for qualifying purchases as long as they try to resolve a merchant dispute before canceling a credit card payment.

About the Author

Stephen Bush is based in Ohio and has been a business finance consultant and writer for more than 30 years. Bush obtained a Master of Business Administration in management and finance at the University of California, Los Angeles.

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