Direct Sales Cooling-Off Period in Malaysia: How to Cancel Within 10 Working Days

What the cooling-off period is

Section 2 of Act 500 defines the cooling-off period as the period of ten working days commencing on the day after the date of the making of a direct sale contract. Two details in that sentence matter. The days are working days, not calendar days. And the clock starts the day after you sign, so the signing day itself is not counted.

KPDN, the ministry that enforces the Act, describes it the same way in its enforcement FAQ: ten working days for the buyer to decide whether to go ahead, during which no goods or services may be supplied and no deposit may be taken. You can read the law yourself in the Act 500 reprint published on kpdn.gov.my. For the rest of the statute, including licensing and the pyramid scheme offence in Section 27B, see our plain-English guide to Act 500.

Which sales are covered

The right attaches to a direct sale, and Section 2 gives that term three meanings. A door-to-door sale is one where the seller, or someone the seller authorises, goes from place to place other than a fixed place of business, or makes telephone calls, seeking out people willing to buy, and then negotiates with them. A mail order sale is one where the seller receives your offer by post or another means of mailing, including electronic means. A sale through electronic transaction is a sale by electronic means using marketing networks for the purpose of getting commission, bonus or another economic advantage.

The first definition is wider than its name. The agent who visits your house, the upline who meets you at a mamak stall and the stranger who phones you all fit, because the definition turns on how the seller found you. A purchase you made by walking into a shop or a company branch on your own, with no visit or call beforehand, is likely to fall outside it.

Some contracts are excluded outright. Under Section 1(3) the Act does not apply where the purchaser is a body corporate, so an order placed in the name of your Sdn. Bhd. gets no cooling-off period. Insurance and takaful contracts are out too, and Section 42 lets the Minister exempt particular sellers. Unsure whether your purchase counts? Ask KPDN before the ten days run out, not after.

What about joining an MLM company? The Act speaks of purchasers and vendors, not members. The starter kit or product package you paid for is a contract for goods, and if it was sold to you through one of the three channels above, Part V applies to that purchase on the plain wording of the Act. The distributor agreement itself runs on the company's own terms, which is where buy-back policies come in further down.

What the contract must contain

Section 23 sets the formalities. A door-to-door contract for goods or services of a value prescribed by regulation, and every mail order contract, must be in writing and signed by both vendor and purchaser. Immediately above the space for your signature it must carry this statement, in capital letters no smaller than 18 point Times: THIS CONTRACT IS SUBJECT TO A COOLING-OFF PERIOD OF TEN WORKING DAYS. You must be given a duplicate copy immediately after the contract is made.

The consequences are blunt. A contract that misses the writing, statement or signature requirement is void under Section 23(4). If you were not handed your copy, Section 23(5) makes the contract voidable at your option. The Act does not state the ringgit value that triggers Section 23 for door-to-door sales. It leaves that to the Direct Sales Regulations, and we could not check the figure against the official regulation text, so confirm the current amount with KPDN. The right to cancel does not depend on that value: Sections 24 to 27 apply to any contract in respect of a direct sale.

A clause that tries to exclude, restrict or modify your rights under the Act is void, and including one is an offence under Section 37. Leave out any of the five particulars below and the contract is void under Section 24(2). Every direct sale contract must contain:

• A detailed description of the goods or services to be supplied.
• The contract terms, including the total amount you must pay or, if that cannot be fixed yet, how it will be calculated.
• The time, place and method of payment.
• The time and place for delivery of the goods or performance of the services.
• A notice, in the prescribed form, telling you of your right to rescind before the cooling-off period expires.

No delivery and no payment during the ten days

Part V goes further than most buyers realise. Section 25(1) says no goods shall be delivered and no services shall be performed under a direct sale contract until the cooling-off period has lapsed. Section 25(4) says no vendor or other person shall accept any money or other consideration from a purchaser under the contract before the period expires. Breaking either rule is an offence under Section 25(5), and KPDN's FAQ lists taking a deposit during the cooling-off period among the offences under the Act.

There is one exception, and it belongs to the buyer. Under Section 25(2) you may serve a written notice requiring the seller to deliver early, and if you do, you are deemed to have waived your right to rescind. Section 25(3) adds a safeguard: that notice cannot be served until 72 hours after the contract was concluded. So read everything you are asked to sign. A request for early delivery is the one document that can cost you the right to cancel, and one signed on the spot together with the order form does not fit the 72-hour rule.

Neither Section 25 nor Section 37 names its own penalty, so the general penalty in Section 39 applies. An individual faces a fine of up to RM100,000, up to three years in prison, or both, rising to RM250,000 and five years for a second or subsequent offence. A company, partnership or society faces a fine of up to RM250,000, or RM500,000 for a repeat offence. Section 38 extends liability to directors, managers and similar officers unless they prove the offence happened without their consent and that they exercised due diligence.

Counting the ten working days: a worked example

Say you sign on a Tuesday. That Tuesday is not counted. Wednesday is day 1, Thursday day 2 and Friday day 3. Saturday and Sunday are skipped. Monday to Friday of the following week are days 4 to 8. After the second weekend, Monday is day 9 and Tuesday is day 10. Your notice has to reach the seller before the end of that second Tuesday, exactly two weeks after you signed. If a public holiday lands on a weekday in between, the last day moves to Wednesday.

The Act does not define working day. This example assumes a Saturday and Sunday weekend and no public holidays. A state with a Friday and Saturday weekend, or a state holiday, changes the count. When in doubt, count the shorter way and act early.

There is a second trap. A notice sent by registered post is deemed served on the expiry of three days from the date it is posted (Section 26(3)). Post it on day 10 and it is treated as served after the period has ended. If you are posting, do it at least four calendar days before your last day. If you are close to the deadline, hand the notice over in person and get a signed, dated acknowledgment.

One more reason to move fast. In the reprint KPDN publishes, the Malay text of the Section 2 definition says only sepuluh hari (ten days), while the English text, the mandatory contract statement in both languages and KPDN's FAQ all say working days. Ten working days is the figure KPDN uses. Serve your notice within ten calendar days and the question never comes up.

How to cancel, and what happens to money and goods

Section 26 sets the method. You rescind by serving on the vendor a notice in the prescribed form, at any time before the cooling-off period expires, indicating your intention to rescind or withdraw from the contract. The form should already be in your hands, because Section 24 requires the contract to include it. The Act names two ways to serve it: deliver it personally to the vendor, or send it by registered post to the vendor at the address specified in the contract.

A WhatsApp message or an email is not one of those two methods. Send one anyway as an extra record, but do not rely on it. Keep the registered post slip and the tracking printout, or the signed acknowledgment if you delivered by hand, plus a photo of the notice itself.

Once notice is given, Section 27 says the contract is deemed to have been rescinded by mutual consent and never to have had effect. Any guarantee tied to it falls away as well. You do not need a reason, and the seller does not need to agree.

What about refunds and returns? Read strictly, the Act assumes there is nothing to unwind, because nothing should have been delivered or paid. It sets no refund deadline and no return procedure. If money or goods did change hands, our reading of a contract that never had effect is that each side gives back what it received: the seller returns every ringgit, and you return the goods unused. That is our reading, not a quotation from the Act, so check it with KPDN or a lawyer if the sum is large. Ask for the money by a specific date in your notice, and get a receipt when you hand goods back. A seller who delivered or took payment early also has a Section 25 problem, which belongs in your complaint if the refund stalls.

Not the cooling-off period: buy-back and return policies

People use cooling-off loosely for any MLM refund. Most refunds to distributors are something else: a contractual buy-back or return policy, offered by the company, on terms the company writes. It is not the statutory ten working days, and missing the ten days does not remove it.

The Act touches these policies only indirectly. Its Schedule lists the features of a pyramid scheme, and several concern exit rights: no written contract or statement of the material terms (which Explanation 2 says include the buy-back policy, cooling-off period, warranty and refund policy), no refund policy for goods bought by participants or consumers, no buy-back of currently marketable goods on reasonable terms at a participant's request, and no way to withdraw. So a licensed company has every reason to put these policies in writing. The Act itself fixes no percentage and no time limit, but KPDN does. Its sample buy-back policy, updated in October 2025 and stated to follow the Direct Sales (Scheme and Conduct) Regulations 2001, says the company must give a written buy-back guarantee and must, at the participant's request, buy back any marketable goods sold to that participant in the previous six months at no less than 90% of the amount paid. Explanation 3 carves out seasonal, discontinued and special promotional items, if that status was disclosed at the time of sale.

For a benchmark, look at the Direct Selling Association of Malaysia (DSAM). The code of ethics summary it publishes says member companies will repurchase, if requested upon termination, any unsold, re-saleable product inventory, promotional material, sales aids and kits purchased within the previous 6 months, and refund the original cost less a handling fee of not more than 10% of the net purchase price. That promise binds DSAM members only, and the contract you signed is what you would actually enforce. The DSAM Code of Conduct page carries the summary. It also says complaints a member company fails to resolve go to DSAM's Code Administrator, whose decision binds the member but not the complainant.

Before relying on a buy-back, find the clause in your distributor agreement and note four things: the window and whether it runs from the invoice date or from termination, the condition the goods must be in, the deductions, and whether you must resign to use it. A company with no written refund or buy-back policy at all is showing one of the Schedule's pyramid features. Compare it against our pyramid scheme warning signs.

Regret a purchase? What to do on day one

1. Find the contract and write down the date it was made. Count ten working days starting from the next day, and mark the last day in your calendar.
2. Check the contract against Sections 23 and 24: in writing, signed by both sides, the capital-letter cooling-off statement above your signature, your own copy, and the rescission notice form. Photograph every page.
3. Do not open or use anything, refuse delivery if it has not arrived, and do not sign any request for early delivery.
4. Fill in the rescission notice that came with your contract. If there is none, write a dated letter that identifies the contract, says you rescind it under Section 26 of the Direct Sales and Anti-Pyramid Scheme Act 1993, asks for any money paid to be returned, and points out that a contract without the notice form is void under Section 24(2).
5. Serve it today if you can: by hand with a signed acknowledgment, or by registered post to the vendor's address in the contract. Keep the slip.
6. Save proof of anything you paid, then message the agent and the company to say notice has been served, so there is a time-stamped trail.
7. Look the company up in our company directory and on the KPDN list. Carrying on a direct sales business without a licence is a separate offence under Section 4, and it makes a stronger complaint.

If the company refuses

Start with a written demand to the company, attach your notice and proof of service, and give a short deadline. If that fails, complain to KPDN through the e-Aduan portal (see how to report, step by step) or the hotline 1800-886-800, and name the sections you rely on: Section 25 for early delivery or payment, Sections 26 and 27 for the ignored rescission. A KPDN complaint can lead to enforcement against the seller. For an order that your money be paid back, the usual route is the Tribunal.

The Tribunal for Consumer Claims (TTPM) hears claims of up to RM50,000 brought within three years. You file Form 1, online through e-Tribunal or at a Tribunal registry, the filing fee is RM5, and lawyers are not allowed to represent the parties at the hearing. One limit matters in MLM disputes. The Tribunal's FAQ says a consumer is an individual who buys for personal or household use, and someone who buys for business purposes is not a consumer. A customer who bought a water filter qualifies. A distributor who bought stock to resell may not, and may need the civil courts or a lawyer's advice instead.

Then tell other buyers. File a community report on CheckMLM and check whether the company already appears on our blacklisted and revoked list. One caution to end on: KPDN has said publicly that it is preparing amendments to Act 500. This guide follows the reprint KPDN currently publishes, which includes the amendments in force from 1 March 2011. If the law changes, the official text wins.