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Returns, Refunds & Right to Cancel

If you bought something that doesn’t meet your expectations or simply come down with a case of buyer’s remorse, do you have the right to return it for a refund or store credit? And do you have the right to cancel a purchase contract? Well, it depends.

Returns and Refunds
Though many retailers allow returns and issue refunds or store credit to customers, the law does not require it unless the item is defective. If a retailer won’t accept returns or charges a “restocking fee” for returned items, it must disclose that.

Right to Cancel
Iowa law does not generally provide consumers with a right to cancel a consumer contract, including your purchase or contract of a vehicle from a dealer’s lot. However, there are several exceptions, including:

  • Door-to-Door Sales: You have the right to cancel most transactions of $25 or more at your home or workplace within three business days. The transactions must cover goods or services that are purchased, leased or rented primarily for personal, family or household purposes. You may cancel for any reason or no reason at all. In Iowa, the right to cancel also covers sales at any temporary place other than the seller’s normal place of business, including a rented hotel, convention facility, warehouse or fairgrounds, and sales by people who approach you in public places. The seller must tell you of your right to cancel and provide you written notice. If the seller does not provide you with a written notice of your right to cancel in the manner required by law, you can cancel until three business days after receiving the notice. If you properly cancel, the seller must refund your money. This right to cancel does not apply to sales conducted entirely by telephone or mail, requests for in-home repairs to personal property, and certain “emergency” purchases where you waive your right to cancel in writing.
  • Buying Clubs: The same right to cancel door-to-door sales applies to most buying club memberships. Buying clubs offer memberships entitling the member to purchase goods or services at a discount.
  • Business Opportunities: The same right to cancel applies to the sale of a business opportunity when the purchaser provides an initial investment exceeding $500, even if it was made at the seller’s place of business.
  • Other Exceptions: Other exceptions that give consumers certain rights to cancel include funeral services and merchandise, social referral services (dating services), exercise clubs, time shares and membership campground contracts.

Additional Dispute Protections through Credit Cards
If you believe an item or service you purchased through a credit card is unsatisfactory, including the quality of what you purchased, you may have the right to withhold payment for the charge in question and dispute it. You generally can dispute a charge above $50 which was purchased in your home state or within 100 miles of your mailing address.

First you must make a good-faith effort to resolve the dispute with the retailer, preferably in writing through the U.S. Postal Service. (If you call your credit card company, it’s also preferable to follow up in writing.) After you notify your credit card company that you are disputing the charge and withholding payment, it cannot report the disputed amount as delinquent to a credit bureau until the dispute is settled or a court issues a judgment against you. The credit card company cannot treat the dispute as settled or collect against you unless it has reasonably investigated the claim. Do not pay the amount in question while you are disputing it, as the payment will end your claim with the credit card company. However, while the dispute is pending you must make a payment toward any undisputed amount.

Once you initiate the dispute with the credit card company, it must respond in writing.

Your credit card company may voluntarily waive the $50 minimum threshold. Check with the company’s terms and conditions regarding purchase disputes.

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