Edited by Michelle TipswordHow Do Credit Card Refunds Work?
Edited by Michelle Tipsword
Quick Answer
- When you return a purchase made with a credit card, you typically receive a credit to your account in a few days to a few weeks.
- Some merchants also offer refunds in the form of gift cards or store credits.
- While waiting for your refund, you should still make your credit card payments to avoid late fees and potential harm to your credit score.
When you return a purchase made with a credit card, you typically receive a credit to your account in a few days to a few weeks, but the timing can vary depending on processing times. You may also have other options for receiving a refund depending on the merchant's policies. Here's what you need to know.
How Do Refunds on Credit Cards Work?
A credit card refund is a credit that's applied to your account when a merchant refunds part or all of a purchase you made with a credit card. Here's how credit card refunds work:
- You make a purchase with a credit card and the credit card issuer pays the merchant.
- You return the purchase and request a refund.
- The merchant refunds the money to the card issuer.
- The credit card issuer posts the refund to your account as a statement credit, reducing the balance on your credit card.
Some merchants may offer the option to get a store credit or gift card equal to the return amount. Other merchants don't issue credit card refunds, only store credit.
Be aware: A refund in the form of a store credit or gift card won't reduce your credit card balance. You still owe the credit card issuer the money for the purchase, even though you returned it.
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How Long Does a Credit Card Refund Take?
Getting a credit card refund can take anywhere from a few days to a few weeks from the time you initiate a return. Several factors affect how long it takes to get your refund.
- Merchant processing times: The merchant must accept the return and issue a refund.
- Return method: Getting a refund may take longer if you return an online purchase by mail. Returning online purchases to a store instead of by mail can speed up your refund.
- Card issuer processing times: It typically takes about three to seven business days for the credit card company to post the refund to your account.
- Billing cycle timing: A refund issued after your credit card's closing date won't show up until the following month's statement, although it 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.
Tip: 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, before returning an item to an online retailer, you may need preauthorization.
Credit Card vs. Debit Card Refunds
Credit card and debit card refunds go to different places. A credit card refund reduces the balance you owe on the card; a debit card refund returns money to your linked bank account.
| Credit Card Refunds | Debit Card Refunds | |
|---|---|---|
| Timeline | Typically a few days to a few weeks, depending on merchant and card issuer | Typically a few days to a few weeks, depending on merchant, payment processor and bank |
| Where the refund goes | To your credit card account as a credit | Back to the bank account linked with your debit card |
| Effect on available funds | Posted refund increases available credit on your card | Posted refund restores funds to your linked bank account |
Some merchants may give you the choice to get your debit card refund in the form of cash. However, merchants typically won't give you a cash refund for a purchase made with a credit card.
What if the Merchant Won't Provide a Refund?
If the merchant won't give you a refund despite your attempts to resolve the issue, you can contact your credit card company to dispute the charge. You can usually do this 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.
Under the Fair Credit Billing Act, you typically have 60 days from the date of the billing statement to dispute a charge and request a chargeback. 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. If the card issuer grants your request, they will issue a chargeback for the amount of the transaction.
Learn more: How to Request a Credit Card Chargeback
How Does a Credit Card Refund Impact Rewards?
When you return a credit card purchase for a refund, you typically 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 get to keep the rewards, but will still need to pay the credit card bill for the returned item.
Frequently Asked Questions
The Bottom Line
Shopping with credit cards can provide benefits such as cash back rewards, travel-related perks and purchase protection. If you return a credit card purchase and request a refund, it's typically made in the form of a credit to your account within a few weeks. While you're waiting for a refund, be sure to keep making your required payments.
If you're wondering how changes to your credit card balances affect your credit scores, you can check your FICO® ScoreΘ for free from Experian or sign up for free credit monitoring. Credit monitoring gives you access to your Experian credit report, FICO® Score tracking and alerts of important changes to your credit report that could signal fraud.
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About the author
Karen Axelton
Karen Axelton is Experian’s in-house senior personal finance writer. She has over 20 years of experience as a journalist and has written or ghostwritten content for a variety of financial services companies.
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