Canceling a transaction under Israel’s Consumer Protection Law: 14 days and a cancellation fee of up to 5%

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What is the period for cancellation of a transaction under Israeli law?

The Consumer Protection Law, 5741-1981, sets a “cancellation period”. This is a window of time in which the consumer may cancel a transaction unilaterally. The consumer does not have to give an explanation, and the seller cannot refuse. This right protects buyers against hasty decisions and against pressure from aggressive sellers. An ordinary contract can be canceled by one party without the other party’s consent only on a ground recognized by law (for example, a breach). The cancellation period, by contrast, lets the consumer withdraw unilaterally, without giving reasons or getting the seller’s approval.

The legal framework: the Consumer Protection Law

The Consumer Protection Law, 5741-1981, sets the right of cancellation in a distance sale (internet, phone, mail) in section 14C, and in a door-to-door sale in section 14. It sets the consequences of cancellation in section 14E (for door-to-door sales, in section 14(b)). For a senior citizen (65 and over), a person with a disability and a new immigrant, the period is longer: four months. In a distance sale, this applies on condition that the transaction included a conversation (section 14C1). Section 14C(a)–(b) of the Law requires the dealer in a distance sale to disclose to the consumer, among other things, the details of the right of cancellation. The dealer must also give the consumer a written document, no later than the time of supply of the product or service. The document includes the details of the transaction and the way in which the consumer can exercise the right to cancel it (for door-to-door sales, section 14(d) of the Law and the regulations made under it).

The right of cancellation in a distance sale is set in the Law itself. Section 14C(c) of the Law provides that the cancellation period is 14 days from the day of receiving the product or from the day of receiving the document containing the details of the transaction (whichever is later). For a door-to-door sale, the rule is in section 14(a) of the Law. The Consumer Protection Regulations (Cancellation of Transaction), 5771-2010, by contrast, apply to a purchase made at the business itself. Certain products are exempt from the right of cancellation in a distance sale (section 14C(d) of the Law). Among them are perishable goods, goods made specially for the consumer, information as defined in the Computers Law, 5755-1995, and goods that can be copied whose packaging the consumer opened.

What is covered by the cancellation period, and what is not?

In a distance sale, the consumer may cancel the transaction from the time it is made, and not only after receiving the product. Receiving the product does not in itself remove the right to cancel. A consumer who examined the product and checked its features as they would have done in a store does not lose the right to cancel. In a service transaction, you can cancel within 14 days of the day of the transaction or of receiving the document, whichever is later. In a continuing transaction, you can cancel even if the service has already begun. You then pay the proportional amount for the service provided (section 14E(b1)). In a service that is not continuing, you must cancel at least two days that are not rest days before the date of the service (section 14C(c)(2)).

However, there are important exceptions. Accommodation, travel, holiday or leisure services cannot be canceled when the cancellation is made within seven days that are not rest days before the date of the service (section 14C(d)(2)). For a product whose value decreased because of a significant deterioration in its condition, cancellation is possible. But the dealer may claim its damages (section 14E(c)).

Refunds: what is the consumer entitled to receive?

When a consumer cancels a distance sale within the cancellation period, the seller must return the money they paid, or cancel the charge. It must do so within 14 days of the day the cancellation notice was received (section 14E(a)(1) and (b)(1) of the Law). For a purchase made at the business, the period is 7 business days, under regulation 4(a) of the Cancellation Regulations. When you cancel because of a defect or non-conformity, the refund is in full. When you cancel not because of a defect, the seller may deduct only a limited cancellation fee (see below). A seller that did not return the money on time is exposed to exemplary damages without proof of damage under section 31A of the Law. The amount is up to NIS 10,000, and up to NIS 50,000 for a repeated or continuing breach.

When you cancel not because of a defect or non-conformity, the seller may charge a cancellation fee of no more than 5% of the price of the product or NIS 100, whichever is lower (section 14E(b)(1) of the Law). It may not charge more than that. “Handling fees”, commissions, or shipping and packaging costs are included in the definition of the cancellation fee (section 14E(d)). They cannot be charged beyond this amount. When you cancel because of a defect or non-conformity, there is no cancellation fee at all. In such a case the consumer must make the product available to the dealer at the place where it was delivered to them (section 14E(a)(2)). When canceling not because of a defect, the consumer must return it to the dealer at its place of business (section 14E(b)(2)). The seller keeps the right to claim its damages if the value of the product decreased because of a significant deterioration in its condition (section 14E(c)). But the burden of proving this is on the seller.

The cancellation procedure: what does the consumer need to do?

To cancel a transaction within the cancellation period, you give the dealer a cancellation notice in one of the ways it must allow (section 14I(a)–(b)). These are by phone or orally at the place of business, by registered mail, by email, or by fax (if the dealer has one). In a transaction that can be made online, it is also online, through a dedicated link on the home page of the website. In the notice you state your name and ID number (section 14I(c)). It is advisable to choose a method that leaves a record. No special wording is required: any clear wording of the intention to cancel is enough.

The consumer must send this notice before the end of the cancellation period. Suppose the seller did not give the consumer a written document with the details of the transaction and the right of cancellation, as the Law requires. The 14 days are counted from the day of receiving the product or the day of receiving the document, whichever is later (section 14C(c) of the Law). So without the document, the cancellation period has not yet started. There is no fixed extension to 12 months in Israeli law.

The seller refuses to recognize the cancellation: what do you do?

If a seller refuses to recognize a consumer’s right to cancel even though the cancellation was made lawfully, the consumer may file a complaint with the Consumer Protection and Fair Trade Authority. The Authority may impose a monetary sanction on a seller that did not return the consumer’s money under section 14E. The sanction is NIS 45,000 for a corporation (adjusted: NIS 53,070 in 2026) or NIS 25,000 (NIS 29,490) for someone who is not a corporation (section 22C(b) of the Law). In aggravating circumstances, it is 1.5 times this amount (section 22D). In addition, the consumer may sue the seller in court for the damage caused by the money not being returned on time.

It is advisable to keep proof of the delivery of the cancellation notice and of its date: a registered mail receipt, a copy of the email or a reference number. This lets you prove that the cancellation was made within the period.

A purchase in a store: the right of cancellation under the Cancellation Regulations

A purchase of a physical product in a store (at the place of business) also carries a legal right of cancellation. The Consumer Protection Regulations (Cancellation of Transaction), 5771-2010, give a right to cancel a purchase only of goods of the types listed in the Schedule to the Regulations whose price is above NIS 50. Among them are furniture, home and garden equipment, electrical and electronic appliances, watches, and any product in its original packaging that has not been opened. The cancellation must be within 14 days of receiving the product. For clothing and footwear, it is up to two days that are not rest days, if the price tag has not been removed. The condition is that the product was returned, was not damaged and was not used (regulations 1 and 2). The dealer may charge a cancellation fee of up to 5% of the price of the product or NIS 100, whichever is lower (regulation 5). It must return the money within 7 business days (regulation 4(a)). An exchange or a credit beyond the legal right is a matter of the store’s policy only.