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Door-to-door sales

I’m thinking about starting a door-to-door sales business. How can I do this legally?

Even under the best circumstances, selling things door-to-door can be difficult.

If you’re reselling products for others, be careful about who your supplier, vendor or franchisors are. Absolutely avoid multi-level marketing or “work at home” scams; you need to be able to trust who you represent.

Your door-to-door business will likely need to comply with all of the regulations that regulate “brick and mortar” businesses, including obtaining a tax identification number, business license and fictitious business name registration. Ask your local government and chamber of commerce whether selling door-to-door requires a special license. You may also need additional licenses depending on what you’re selling—for example, fresh produce usually requires a special permit.

If you plan on hiring employees, check with the Departments of Labor and Industrial Relations to make sure you comply with all employment laws. California specifically regulates employing minors under the age of 16 for door-to-door sales.

You are also required to comply with the three-day sales cancellation rule, which provides customers a three- day rescission period (excluding Sundays and holidays) to cancel purchases of $25 or more for personal items that are sold either in the customer’s home or at a location which is not the seller’s place of business.

You are required to provide a receipt and copy of the contract, including the sales date, your name and address. On the receipt or contract you must include a statement (in at least 10-point bold type) disclosing the cancellation right. In addition, you must give the customer a separate “notice of cancellation” form, to use if they wish to cancel the purchase. Finally, you must also orally inform the customer about the right to cancel.

Potential customers have good reason to be wary in letting you into their homes. Criminals often pretend to be salesmen to research potential victims. If a potential customer asks you to leave their property you must comply immediately.

When you visit a home, you must disclose your name, your company, what you are selling and that the purpose of your visit is to sell something. Display the proper identification immediately.

If you want to avoid potential legal issues, be honest, polite and courteous at all times, especially when describing your products. Offers and contracts must be written in the same language that you use to make your pitch. Never pressure someone to sign anything without reading it and absolutely never change or add to a contract after execution.

Mary Luros is a business law attorney with Hudson & Luros LLP in Napa, and can be reached at mary@hudsonluros.com. The information provided here is not legal advice, nor does it form an attorney-client relationship with the author. The author makes no representations as to the reliability or accuracy of the above information.