The cooling-off myth
The biggest misconception in consumer law is that customers always have a cooling-off period. They do not. There is no general right to return goods or cancel an ordinary in-store purchase simply because the customer changed their mind — in-store “change of mind” returns depend on the shop’s own policy. The CPA’s real cooling-off rights are specific and limited, and they do not overlap: the direct-marketing right gives way where the online-transactions regime applies.
“This section does not apply to a transaction if section 44 of the Electronic Communications and Transactions Act applies to that transaction.”
Direct marketing — five business days (section 16)
Where a sale results from direct marketing — someone approached the consumer to sell — the consumer may rescind within five business days, no reason needed.
“A consumer may rescind a transaction resulting from any direct marketing without reason or penalty, by notice to the supplier in writing, or another recorded manner and form, within five business days after the later of the date on which— (a) the transaction or agreement was concluded; or (b) the goods that were the subject of the transaction were delivered to the consumer.”
On rescission, the supplier must refund the consumer within 15 business days of receiving the notice (or the returned goods), under section 16(4).
Online sales — seven days (ECTA section 44)
For electronic transactions, a separate statute — the Electronic Communications and Transactions Act — gives a seven-day cooling-off right. This is where most “online return” rights actually come from.
“A consumer is entitled to cancel without reason and without penalty any transaction and any related credit agreement for the supply— (a) of goods within seven days after the date of the receipt of the goods; or (b) of services within seven days after the date of the conclusion of the agreement.”
The right is not unlimited. Section 42(2) excludes a defined list of electronic transactions from the section 44 cooling-off — the exclusions that most often catch suppliers out are made-to-order or perishable goods, services already begun with the consumer’s consent, and date-specific accommodation, transport, catering and leisure bookings.
“Section 44 does not apply to an electronic transaction— (a) for financial services…; (b) by way of an auction; (c) for the supply of foodstuffs, beverages or other goods intended for everyday consumption…; (d) for services which began with the consumer’s consent before the end of the seven-day period…; (e) where the price… is dependent on fluctuations in the financial markets…; (f) where the goods— (i) are made to the consumer’s specifications; (ii) are clearly personalised; (iii) by reason of their nature cannot be returned; or (iv) are likely to deteriorate or expire rapidly…; (j) for the provision of accommodation, transport, catering or leisure services… on a specific date or within a specific period.”
For the broader online-selling duties — the pre-checkout disclosure list and the rules on unsolicited communications — see our guide to e-commerce compliance under ECTA.
Advance bookings, reservations and orders (section 17)
Separately from change-of-mind cooling-off, section 17 gives consumers a right to cancel an advance booking, reservation or order — while letting the supplier protect itself with a reasonable deposit and a reasonable cancellation charge.
“(2) Subject to subsections (3) and (4), a consumer has the right to cancel any advance booking, reservation or order for any goods or services to be supplied. (3) A supplier who makes a commitment or accepts a reservation to supply goods or services on a later date may— (a) require payment of a reasonable deposit in advance; and (b) impose a reasonable charge for cancellation of the order or reservation…”
What is “reasonable” is judged by the nature of the goods or services, the length of cancellation notice, the supplier’s ability to resell, and industry practice (s 17(4)). One hard limit overrides all of that: no cancellation fee may be charged where the consumer cannot honour the booking because of death or hospitalisation.
“A supplier may not impose any cancellation fee in respect of a booking, reservation or order if the consumer is unable to honour the booking, reservation or order because of the death or hospitalisation of the person for whom, or for whose benefit the booking, reservation or order was made.”
Section 17 does not apply to franchise agreements or to special-order goods (s 17(1)). And the longer-term commitment of a subscription or service plan is governed not by section 17 but by the fixed-term rules in section 14.