Making the decision to cancel your wedding is tough all on its own, not to mention that you must now worry with the wedding plans that have already been made. Before anything else, you must notify your guests of the cancellation by either sending out a printed card or calling each guest. The next step would be to notify all of your vendors and cancel their services in writing.
In most states the bride technically is not required to give back the ring, no matter who cancelled the wedding. However we feel that giving back the ring is the best option. While the ring is considered to be a gift, it is more importantly a symbol of your commitment to one another. Would you want to continue holding onto a ring that reminds you of your past relationship? It is also not considered proper etiquette to sell the ring, even if you still consider it to be a gift. There is no question that if it is a family heirloom, you must give it back. If you and your fiancé purchased the ring together we recommend selling the ring and splitting the money equally. In the end, giving back the ring enables you to both start fresh without holding onto the past.
Also, if you cancel your wedding it is proper etiquette to return all gifts to their sender. If you actually opened the gift before your wedding you should send an identical replacement to the sender or send them a payment for the cost of the gift. You should also not send back engraved gifts, but should reimburse them as well. In addition, a simple note should be included with the gift and all gifts should be returned within 2-3 months after the wedding was cancelled.