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How does a credit card refund work?

Credit card refunds can be very simple for credit card customers.
Find out how to make a credit card refund, as well as what information you need, and how long they take.

There are a variety of reasons you may want a refund. You may have ordered something online, and when it arrived, it was faulty, damaged, or didn’t meet your expectations. Or maybe you realized you no longer want or need the item when you get home from the store.

Most retailers make the credit card refund process straightforward. You will need the receipt and the credit card used to make the original purchase. If you do not have this credit card available, some merchants may be able to obtain the details from the receipt. They may also be willing to offer you store credit or a gift card for the value of the purchase.

The retailer will not be able to give you cash or make the refund to a different credit or debit card. When you purchase something with your credit card, the issuer makes the payment to the retailer on your behalf. You do not pay the retailer directly and are not billed by your credit card issuer for the transaction until a later date.

Credit card refunds are not the same as billing disputes. Refunds involve returning items to the retailer to have the money credited back into your account. Billing disputes cover fraudulent activity on your account, charges for purchases you never received, errors in the amount you paid, or other erroneous activity. For billing disputes, contact your credit card issuer so they can demand a chargeback from the merchant.

How long will the refund take?

The return method and retailer’s policies affect how long it takes for you to receive a credit card refund. It will typically take between five to seven business days for the funds to appear in your account, but this can vary. Some retailers will refund you immediately, while others can take up to 30 days. You may have to wait even longer if you are returning the item by mail due to the added shipping time.

Credit card refunds can take longer than cash or debit card refunds, but they offer you greater protection against fraudulent and disputed charges. Other benefits include price protection, which ensures you always get the best price on your purchase, as well as return protection. This can extend the amount of time you have to make returns beyond the retailer’s time limits and can cover you if you don’t meet their refund requirements.

Can I keep any points I accumulate?

You may be able to accumulate reward points on purchases when choosing to use your credit card over cash or debit cards. These perks are available on both personal and corporate rewards cards, with issuers offering customers everything from travel miles to cashback.

When you return an item, you will lose any reward points you earned from that purchase. Refunded amounts will also be deducted from any spending incentives, such as sign-up bonuses. Credit card issuers do this to stop customers abusing their reward programs.

Will I still have to make a payment?

Even if you’re waiting for a credit card refund, you may still need to make the minimum payment. The next credit card payment may be due before the refund is processed if you return an item toward the end of the billing cycle. In this case, you will need to make the minimum payment to avoid late fees. You will also have to pay any interest or additional fees accrued from the purchase, as the refund will not offset these costs.

When the refund is paid into your account, the amount will be taken off your current balance. If the refund amount is greater than your current balance, you will receive it as credit. This appears as a negative balance on your account. For example, if you pay off your balance in full and receive a $100 refund, it would appear as -$100 and will be deducted from your future transactions.

If you rarely use your credit card or urgently need the funds, you can request that your credit card issuer sends you a check for the negative balance rather than giving you credit on your account.