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Whether an item turns out to be defective, you're not satisfied with a service you received or you simply change your mind about a purchase, there are lots of reasons you might want a refund for something you bought with a credit card. When you return a credit card purchase, you typically get a credit to your credit card account, but you may have other options depending on the merchant's policies.
How Do Refunds Work on a Credit Card?
When a merchant gives you a refund for a purchase made with a credit card, they don't refund the money to you directly. Instead, they ask the credit card issuer to credit your account for the return amount. The amount appears on your credit card statement as a statement credit.
Instead of crediting your credit card, some merchants may offer you the option to get a store credit or gift card equal to the return amount. Other merchants don't issue credit card refunds and will only issue store credit.
A refund in the form of a store credit or gift card won't erase the purchase amount from your credit card balance. You'll still owe the credit card issuer the money for the purchase, even though you returned it.
Learn more >> What Is a Statement Credit?
Credit Card vs. Debit Card Refunds
When you buy something with a debit card, the payment comes directly from your linked bank account. If you request a refund for a purchase made with a debit card, merchants typically refund the money directly to that bank account. Some merchants may also give you the choice to get your debit card refund in the form of a store credit, gift card or cash.
When you make a purchase with a credit card, however, you're borrowing money from the credit card issuer. Most merchants won't give you a cash refund for a purchase made with a credit card, but some will issue your refund in the form of a store credit or gift card if you ask.
How Long Does a Credit Card Refund Take?
How long it takes to get a credit card refund can range from a few days to a few weeks, but may take longer if you return an online purchase by mail. Once the merchant accepts the return and issues a refund, you'll typically wait about three to seven business days for the credit card company to post the refund to your account.
A refund issued after your credit card's closing date won't show up until the following month's statement, but will appear sooner on your card's current balance. Checking your account online or in your card issuer's mobile app is the fastest way to see when your refund is issued.
Review the merchant's credit card return policy to get an idea of how long your refund will take and any special rules you may need to follow when requesting a refund. For example, you may need preauthorization from an online retailer to return an item. Returning online purchases to a store instead of by mail can speed up your refund.
What if the Merchant Won't Provide a Refund?
If the merchant won't issue a refund, you can contact your credit card company to dispute the charge and ask for a chargeback. You can usually dispute a charge by calling the customer service number on the back of your credit card, emailing customer service, using the card issuer's app or writing a letter.
You typically have 60 days from the date a charge appears on your account to dispute it. The credit card company then has 30 days to acknowledge your dispute, plus two billing cycles (or a maximum of 90 days) to investigate. While the dispute is being investigated, you generally do not have to pay the amount in dispute or any interest on that amount.
How Does a Credit Card Refund Impact Rewards?
When you return a credit card purchase, you'll lose any points, cash back or other rewards you earned by making that purchase. That could be a problem if you're close to qualifying for a big reward, such as a welcome bonus or enough travel points to book a flight. In that case, you can see if the merchant will give you a store credit or gift card instead of a refund. You'll still need to pay the credit card bill for the returned item, but you'll also get to keep the rewards.
Frequently Asked Questions
Getting an account credit for returning a purchase could increase your credit score if it lowers your credit utilization ratio, which is the amount of credit you're using relative to your total credit limits. This ratio should be 30% or less to avoid damaging your credit score.
Conversely, your credit score could suffer if a purchase pushes your credit utilization ratio above 30% and the credit for returning that purchase takes a long time to show up. Until the account credit posts, your high credit utilization can negatively affect your credit score.
Credit card refunds are considered account credits, not payments or partial payments. You still need to make at least your monthly minimum payment, even if you're getting a statement credit for a return. Otherwise, you could owe late fees or hurt your credit score. If you don't pay the balance when you receive your statement and later return the purchase, you'll have to pay any interest that accrued on the purchase amount before the refund posts.
Learn more >> What Happens if I Don't Pay My Credit Card Bill?
Your card may have a negative balance after you receive a refund, meaning your balance will appear with a minus sign in front of it.
A negative balance simply means you have a credit in that amount on the card. You can either spend it or ask your card issuer to refund the amount by mailing you a check or transferring the money to your bank account. In some cases, a negative balance can help your credit score if it lowers your credit utilization ratio.
The Bottom Line
Shopping with credit cards can provide benefits cash doesn't offer, such as cash back rewards, travel-related perks and purchase protection. Just be aware that it typically takes longer to get a refund for a credit card purchase than for a cash purchase. While your credit card refund is pending, you're still responsible for making timely payments on any outstanding balance.
Debt payment history is the biggest factor in the FICO Scores used by 90% of top lenders. Keep tabs on your credit card due dates so you remember to make timely payments. Want to learn more about your credit score? Sign up for free credit monitoring services from Experian to track your FICO® Score☉ , get alerts to important changes and help protect against identity theft.