The five-day cooling-off after direct marketing
When a South African customer can cancel a sale that came from direct marketing, how fast the business must refund, and when the ECT Act applies instead.
By Achekam · · 4 min read · For Running a business businesses in South Africa
A sales agent phones a homeowner about a solar geyser, a representative knocks on doors with a water filter, a call centre signs someone up for an insurance add-on. Each sale started with the business approaching the customer, not the other way round. South African consumer law treats those sales differently, because a customer who was approached had less time to think.
The difference is a cooling-off right. For a few days after the sale, the customer can change their mind without giving a reason, and the business must give the money back. This guide sets out the rule, the refund deadline, where online sales follow a different law, the separate right to stop the marketing itself, and how to process cancellations.
Five business days to rescind
The Consumer Protection Act text published on the government's page lets a consumer rescind a transaction resulting from direct marketing within five business days. That is section 16 of the Act as originally published; later amendments are not reflected in that text. The government's page for the Consumer Protection Act carries the Act's official text and summary.
The dtic's booklet on the Act puts it in plain language: direct marketing transactions must include a cooling-off period, generally five business days, during which the consumer may cancel without giving reasons and without penalty.
"Without reasons" means exactly that. The customer does not have to say the product is faulty or the price too high. "Without penalty" means no cancellation fee for using the right. Business days exclude weekends and public holidays, so a sale made on a Thursday gives the customer into the following week.
Refunds within 15 business days
Once a customer rescinds, the clock moves to the business. The Act as published requires the supplier to refund any payment within 15 business days, and the dtic booklet repeats that the consumer is to be refunded within 15 business days.
Fifteen business days is a firm deadline, not a target. Build it into the cancellation process so that a cancelled sale triggers a refund with a due date, rather than waiting for the customer to chase it.
Where the ECT Act applies instead
Not every remote sale falls under this section. The Act as published says section 16 does not apply where section 44 of the Electronic Communications and Transactions Act applies.
The ECT Act text on the government's page gives a consumer the right to cancel an electronic transaction without reason or penalty within seven days after receiving the goods, or after concluding the agreement for services, with any payment refunded within 30 days. So a sale concluded electronically, such as through a website, is generally governed by that seven-day right and the 30-day refund rather than the CPA's five business days and 15-day refund. Seven-day cancellation for online purchases covers that rule in detail.
| Sale | Cooling-off | Refund within |
|---|---|---|
| Direct marketing (phone, door-to-door) | Five business days | 15 business days |
| Electronic transaction under ECT section 44 | Seven days after receipt or agreement | 30 days |
Where a sale is both marketed directly and concluded online, take advice on which rule applies; as published, the CPA's section steps aside wherever the ECT Act's section applies.
The right to stop marketing approaches
Separately from cancelling a sale, the Act as published gives anyone approached for direct marketing the right to demand that it stop, in section 11. It also requires the marketer to have procedures to receive such demands.
That second part is a practical obligation. A business that markets directly needs a way for people to say "stop": a number to call, an address to write to, an instruction agents must log, and a list that is checked before the next campaign. A demand that is received but not recorded is easy to ignore by accident. Telephone marketing has data-protection rules as well; see POPIA and telephone marketing.
Processing cancellations in Achekam
When a customer cancels within the cooling-off period, the books have to show the sale reversed and the money returned.
Cancelling the invoice. In Achekam a credit note is issued from the invoice it corrects, in full or for chosen lines, posted to the ledger, and can be downloaded as a PDF or e-mailed to the customer. Any leftover credit is held for the customer. Issue the credit note on the day the cancellation is received, so the record shows the business acted promptly.
Refunding an online payment. If the customer paid through an online payment link, Achekam does not send the refund through the gateway. The refund is made in the gateway's own dashboard, and a person then records it in Achekam. Make that recording part of the same task, so the customer's account and the bank match.
Refunding by transfer. For customers who paid by EFT, make the refund from your bank and record it against the customer's account.
A cancellation routine
- Log the date and time the cancellation was received, and how.
- Check it is within five business days for a direct-marketing sale, or the ECT period for an online one.
- Issue the credit note the same day.
- Make the refund, and record it, well within the 15 business days.
- If the customer also asked not to be contacted again, add them to the do-not-contact list.
Cooling-off rights exist because direct marketing puts the customer on the back foot. A business that honours them quickly turns a cancelled sale into a customer who may come back on their own terms.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
