How Do Credit Card Refunds Work?

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

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.

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