Posted in Marketing and Strategy Terms, Total Reads: 298
Definition: Cooling Off Period
It is a time duration, following the purchase of goods by a consumer, when the buyer can and is allowed to cancel the purchase, return the goods to the supplier/retailer, for any valid reason and get a full-refund.
Offering a cooling off period to customers, encourages them to make impulse purchases and/or increases the likelihood of purchase, by reducing the perceived risk (of dissatisfaction/ malfunction/defect/change of mind) involved in purchase of goods.
There are certain types of sale where a cooling period is not offered.
For e.g. in case of air tickets or train tickets, a full refund is never obtained and a penalty is levied as cancellation charge. Also, in such cases, the cooling off period lasts till the date of travel and the penalty of cancellation increases as the date of travel approaches, culminating in a zero refund for cancellations just before the travel time.
In purchase of services, for e.g. an internet connection, cooling off period ends when the customer starts using the service. The cooling off period exists between the purchase (placing order and payment) and the start of service.