What is buyer’s remorse? And how to avoid it
September 27, 2022 8 min read
Have you ever bought something and then regretted it? If you have, you’re not alone. There’s actually a name for this type of regret: buyer’s remorse. But what exactly is it and is there anything you can do about it?
Read on to learn about buyer’s remorse and the steps you could take to avoid this feeling in the future.
- Buyer’s remorse describes the feelings of regret that a consumer may feel after making a purchase.
- The Federal Trade Commission’s (FTC) Cooling-Off Rule offers some buyer’s remorse protections—but the rule doesn’t apply to all purchases.
- There are ways to potentially avoid buyer’s remorse, such as returning unwanted purchases, using the 24-hour rule or budgeting for bigger-ticket items.
- Some states provide protections for consumers who purchase an item—like a car—and later learn the item is defective. These protections are typically called “lemon laws.”
Buyer’s remorse definition
Buyer’s remorse refers to negative emotions—such as regret, anxiety or guilt—that consumers may experience after buying an item. It’s typically linked to large purchases—like a car or a new home. But some people may experience it after smaller purchases—like buying a new bag or set of golf clubs.
Is it normal to feel buyer’s remorse?
A person could experience buyer’s remorse for a number of different reasons. For example, impulse buys or overspending could cause a consumer to regret their purchase. A new homebuyer may worry they missed out on something better on the market. Others might feel like they made the wrong decision or didn’t do enough research before buying.
Whatever the reason, buyer’s remorse is something many people may feel at some point in their lives. In fact, a recent Bankrate survey found that 64% of millennials are now second-guessing their recent home purchases. Many of these first-time homeowners cited unexpected maintenance costs and spending at the top end of their budgets as the main reasons for their remorse.
It’s normal to have buyer’s remorse sometimes, so don’t be too hard on yourself. Instead, it’s helpful to think about why you bought a certain item. Understanding your current spending habits can help you make better financial decisions in the future.
How to deal with buyer’s remorse
If you have regrets about a recent purchase, these strategies might help you manage your buyer’s remorse.
Try to return smaller purchases
If you’re experiencing buyer’s remorse over a smaller purchase—like new clothes—returning the items may help these feelings pass. However, it’s important to check the merchant’s refund policy and confirm the time limits for returns.
It’s also important to consider how the original payment method could affect your return options. If you used a credit card to purchase an item and the item is defective or the merchant isn’t honoring the return policy, you may have the right to dispute the charge. But it’s often easier to work with the merchant directly. You can contact your credit card issuer to learn more about the dispute process.
Make a budget to manage spending
Instead of beating yourself up over money missteps, you can use them as a learning opportunity. Creating a budget can help you see where your money is going and help you take control of your finances. Setting money aside over time could help you curb impulse spending and make better financial decisions in the future.
24-hour rule: Some personal finance experts suggest budgeting with the 24-hour rule to limit unplanned spending. Followers of this rule wait a full 24 hours before purchasing an item they want.
For larger purchases, experts recommend a variation of the 24-hour rule. For more expensive items, they suggest waiting 24 hours for every $100 of an item’s price. If you wanted to buy a $2,000 laptop, you would wait 20 days to make the purchase. Doing so could give you time to explore your options and research the best product for your needs.
Sinking funds: Starting a sinking fund is another money-saving strategy that could help you manage feelings of buyer’s remorse. A sinking fund lets you save money for a specific purchase or goal. You could use a sinking fund to save for large purchases—like a vacation or a down payment on a house. You can choose a specific amount to set aside—like $50 per paycheck—to gradually reach your savings goal.
Make the most of your situation
It’s helpful to figure out why you’re experiencing buyer’s remorse. Did your purchase come with unexpected costs? Are you wondering if you could have gotten a better deal elsewhere? Is the item not living up to your expectations? Once you have the answer to these questions, you could explore some of your options.
It can be normal to have anxiety after making a large purchase. If you’re feeling buyer’s remorse after buying a new home or car, it may help to review your reasons for making that purchase. Once you run the numbers again, you may feel more confident about your buying decisions.
Consumer protections and lemon laws
However, sometimes concerns about a purchase go beyond buyer’s remorse. If you buy an item and the seller doesn’t disclose the item’s defects, you may have legal protections—like lemon laws. These laws can protect consumers who unintentionally buy flawed products.
Automobile lemon laws
For instance, a car may be called a lemon if it has severe defects while under warranty.
If your car qualifies for lemon law protections, the manufacturer could have to refund your money or replace the vehicle. But it’s important to note that lemon laws can vary by state. And these laws typically only apply to new cars that meet the following requirements:
- Miles driven: The defect occurs in a specific amount of time or after the car has been driven for a certain number of miles.
- Defect severity: Defects generally need to impact the ability to operate the vehicle for the car to be classified as a lemon.
- Opportunity to repair: State laws usually require a certain number of repair attempts before lemon laws are applied.
- Time spent in the shop: Defective vehicles typically spend several days in a car shop before they can be considered lemons.
If you’re having buyer’s remorse due to a new home purchase, there are some consumer protections you may want to consider. For example, you may be able to back out of an accepted offer if the contract has certain contingencies. If you have a home inspection contingency and the inspector finds unexpected issues, you could back out of the purchase and get your earnest money refunded.
Backing out of an accepted offer that doesn’t include contingencies can be more difficult. But certain home loans may be eligible for the right of rescission. This right gives consumers three days to cancel certain loans, such as home equity loans, home equity lines of credit (HELOCs), reverse mortgages and refinancing a home.
The right of rescission is typically only valid within three days of when:
- A promissory note is signed.
- A borrower receives a Truth in Lending Act (TILA) disclosure statement.
- A borrower receives two notices of their right to rescind.
If these options don’t apply to your specific purchase, there are other protections that may be helpful.
Buyer’s remorse law: How the FTC’s Cooling-Off Rule works
The FTC created the Cooling-Off Rule to offer protections to consumers who purchase goods or services through door-to-door sales or at temporary sales locations. The rule gives consumers three days from the time they sign a contract to cancel or back out of a sale. The Cooling-Off Rule may only apply in the following instances:
- The rule applies to purchases mainly intended for personal, family or household use.
- Qualifying purchases made at your home must be valued at $25 or more.
- Qualifying purchases made at temporary sales locations must be valued at $130 or more.
The rule doesn’t apply to some purchases, such as real estate, insurance or securities. It also doesn’t apply to vehicles bought at a temporary location if a seller has a permanent business location or arts and crafts purchases made at places like schools. You can read more about the Cooling-Off Rule on the FTC’s website. And you could also contact your state’s consumer protection office to see if any protections apply to your purchase.
How to avoid buyer’s remorse in the first place
Taking the time to research your purchasing options and weigh the potential costs and benefits of an expense may help you avoid buyer’s remorse in the future.
If you want to avoid buyer’s remorse, it may be helpful to consider the following:
- Assess an item’s value. If you’re shopping for clothing, it could be a good idea to consider cost per wear. Is the item you want a trendy piece you’ll only wear a few times? If so, are you willing to spend the same amount of money that you would on something you could wear every day? Answering these questions ahead of time can help you buy the items you want at the prices you can afford.
- Do your research. Are you buying a new home appliance, cellphone or computer? If so, research product details and consumer reviews to help you make an informed purchase. You may also want to read the fine print. Some items can have hidden costs—like service fees and charges—that can increase your total purchase price. Having a cost estimate ahead of time can help you avoid sticker shock.
- Prepare for big purchases. If you’re planning for a large purchase, it’s helpful to make a budget. It’s also a good idea to save up for a down payment and determine a realistic monthly payment range. Having these figures in mind can help you make a purchase that fits your financial situation.
Buyer’s remorse in a nutshell
Buyer’s remorse can be unpleasant, but there are ways you can overcome this feeling—or even avoid it in the future. It’s a good idea to research your options ahead of time and budget for big purchases.
Avoiding impulse buys and understanding a retailer’s return policy may also be helpful. And if you find out your recent purchase is actually defective, you can explore consumer protections that may apply to your situation.
Want to learn more about preparing for the homebuying process and avoiding buyer’s remorse? Check out Capital One’s article on important questions to ask when buying a house.