Do you handle money differently than your family and friends? Are you ever surprised by…
Whether it’s a beautiful necklace that caught your eye, that piece of art you needed to add to your collection or that impulse purchase of a new car. At some point, you’ve probably bought something that you didn’t need or couldn’t afford but you convinced yourself that you had to have. Then, an hour, a day, or a week later, you feel that pit of regret in your stomach. You start to question your purchase decision and contemplate whether it was worth the hefty price tag. You wonder, “Was this really the best use of my money?”
We’ve all been there.
This is buyer’s remorse.
What is Buyer’s Remorse?
Buyer’s remorse is a feeling of regret or anxiety that you experience after making a purchase. It can accompany an item as small as a fancy latte or as large as a boat or house. It’s a totally natural feeling that we’ve all experienced once we buy something that we know deep down we can’t afford or we don’t need.
What you might not know is that, in some cases, there are actions you can take to reverse your purchase decision and eliminate the feeling of buyer’s remorse.
How to Eliminate Buyer’s Remorse
One of the simplest ways you can eliminate the feeling of buyer’s remorse is by returning the item in question. If you purchase a new pair of shoes or indulge in an item from the Home Shopping Network, most of the time you can feel a sense of relief by sending the item back for a refund.
However, sometimes, it’s not as easy as walking into a store and asking for a return. Luckily, there is something called the Consumer Protection Act (CPA) which outlines the buyer’s remorse laws that are in place to help buyers out of regrettable situations.
What is the Consumer Protection Act (CPA)?
The CPA is a piece of legislation that came into effect in 2002. Its purpose is to outline the rules and regulations for what businesses can and can’t do when interacting with customers. The CPA applies to all in-store sales, door-to-door sales, and online purchases. The goal is to protect consumers from being taken advantage of by unfair business practices.
The CPA is provincially legislated, which means there are differences between how consumers are protected in Alberta versus Ontario. It’s a good idea to familiarize yourself with the CPA in your province so you know your rights.
Consumer Protection Ontario
Under the CPA in Ontario, if you purchase a product or service that costs more than $50, you must get a written contract for the transaction in the following scenarios:
This includes the following scenarios:
- If you purchase a product or service while at home from a door-to-door salesperson
- If you sign up for a membership from a fitness club or buying club
- If you purchase a subscription service such as a magazine or music streaming service
- If you hire an individual or business such as a general contractor
The contract must contain all of the purchase details as well as any credit terms that you have agreed to. As with any contract, it’s important that you read and understand all of the fine print before signing.
The Cooling-Off Period
Within the CPA there are rules in regards to how you can cancel a contract with a seller. One of your rights is to exercise what is known as the cooling-off period for certain types of contracts.
The cooling-off period is a specific number of days from which you sign a contract to when you can cancel the contract. You can cancel your contract at any time within the cooling-off period by writing a cancellation letter to the business. You can send your letter by mail or email to ensure you have a written record. If you decide to reach out to the company by phone, keep detailed notes about your conversation including who you talked to, what you talked about and when you contacted the business.
When you cancel the contract, all other agreements associated with the purchase including any financing plans will also be terminated.
There are different cooling-off periods for various products and services. For any contracts made within your home, you typically have a 10-day cooling-off period. When you request to cancel your contract you do not have to provide a reason why.
In addition to contracts made inside your home, there are other types including:
- Payday loan. In Ontario, you have two business days to cancel a contract for a payday loan.
- Water heater. From the time you sign your contract, you have a 20-day cooling-off period for a water heater.
- Pre-construction condo. You have a 10-day cooling-off period once you have signed the purchase agreement for a pre-construction condo.
- Timeshare. Consumer law states that you have a 10-day cooling-off period after you buy a timeshare or sign up with a vacation club.
For most contracts, the company is permitted 15-days to return your money. For payday loans, they have to provide a refund within 2 days. If the contract was for a physical product, the company is responsible for picking it up or paying for any costs associated with picking the item up.
An important exception to the cooling-off period.
To prevent buyers-remorse that you can’t undo, it’s important to understand which products and services do not offer a cooling-off period. For instance, in Ontario, there is no cooling-off period for car purchases.
In Ontario, car sales are covered under the CPA and the Motor Vehicle Dealers Act (MVDA). If you buy a car and the dealer has provided an honest overview of the basic information about the vehicle, then there is no getting out of the contract. So, when it comes to buying a car make sure you think long and hard before making a purchase.
For more information about cooling-off periods for different products and services visit the Consumer Protection Ontario website here.
How Can a Licensed Insolvency Trustee (LIT) Help Me?
If you are in debt but continue to make purchases that you know you can’t afford, you are not alone. A Licensed Insolvency Trustee (LIT) can work with you to review your debt management options and help you design a financial path forward.