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Credit Card Basics

How Long Does a Credit Card Refund Take?

You bought something online only to realize you don't love it: The jeans don't fit. The shampoo smells like wet dog. Or you must now confront the fact that those $200 sneakers just aren't "you." You return the item, but it can take some time for the funds to appear on your credit card account.

How long it takes for a refund to process and post will vary based on a number of factors—including how quickly you initiate the return, how fast the merchant processes it and how long it takes your credit card company to post the credit to your account. All told, you'll probably wait a week or two before your refund is finalized.

Do All Refunds Take the Same Amount of Time?

The speed at which you'll get your money back varies widely, but there are a few things you can look into to get a better idea of when the funds will appear in your account.

First, check the merchant's return policy. Every seller sets their own policy for accepting and processing returns. Read through the entire policy to find out:

  • Whether and how they handle refunds: Some merchants only offer store credit. Others may require you to get a pre-return authorization before you send anything back.
  • How to return your item: Who pays for shipping? Can you return the item to a store location near you?
  • How quickly they issue a refund: This can range from "immediately" to 30 days or longer. Amazon's policy says they will process your credit card refund in three to five business days after receiving a returned item. Madewell.com says to allow "up to two weeks" for a return to process.

Once the merchant processes your refund, it's up to your card company to post the credit to your account. This typically takes three to seven business days.

These timeframes apply to simple refunds, in which you and the seller agree to a return. If the seller does not agree, you can work with your card company to dispute the charge and get your money refunded. This is a separate process that may take as long as six months to resolve.

Can You Speed Up the Refund Process?

If you add up each of these steps, it's easy to see how much time even a simple return can take. Although getting a refund credited to your account almost never qualifies as fast money, you may be able to accelerate the process by taking these steps:

  • Get it there faster. Macys.com processes refunds within three to five days after receiving an item by mail, but items returned to a store are credited immediately. Dropping your item off at a retail location eliminates shipping time from the equation. Some online-only retailers may also have agreements with brick-and-mortar businesses to process their returns, such as Amazon has with Kohl's. If you have to ship your return, expedited shipping can get it there faster—for a price.
  • Take advantage of loyalty benefits and store credit. Some merchants offer expedited return shipping or faster return processing to customers who belong to their loyalty programs. And if you're open to receiving store credit instead of a refund to your credit card, you may get it faster, since your card issuer won't need to get involved.

How Does a Refund Affect Your Credit Card Account?

To understand how a refund works, it helps to understand how credit card payments are processed. When you make an online purchase using your credit card, the merchant requests payment from your card company. Your card issuer makes a payment on your behalf and adds that amount to your card balance, reducing your available credit line. In effect, they're loaning you the money to buy the item. This is why most merchants will only issue a refund to the card you used for the original purchase—the money part of your transaction happened with the card company and not you.

Any money refunded to your account is treated as an account credit. It does not count as a payment or partial payment. And you won't receive it as a separate payout: The card company won't send you a check for the refund. It's simply a credit on your account.

Say you bought a $2,000 mattress with a yearlong return policy. Three months later, you decide it's ruining your sleep and return it for a refund to your credit card:

  • You are responsible for payments that are due on this balance for the three months you own the mattress.
  • You are also responsible for any payments that might be due while you're waiting for the mattress company to issue a refund and for the card company to credit your account.
  • You will still be liable for any interest charged against the $2,000 is you carried a balance during the three months you owned the mattress. This money will not be refunded to you.
  • If you scored any credit card rewards points with your purchase, they'll be reversed when the refund goes through.

If you aren't already using a mobile app to check account activity, now is a good time to start. You'll be able to track your refund—and view transactions, due dates and notifications. Monitoring your account activity is an important part of managing your credit cards and key to staying current on your payments and understanding your interest payments.

Will a Delayed Refund Hurt Your Credit?

If your refund is taking longer than expected, don't despair too much. Even a delayed refund shouldn't hurt your credit, as long as you manage your account wisely while the refund is pending. Remember to pay your bill by the due date and mind your credit limit so you don't overextend yourself.

A delayed refund can, however, start to affect your credit score if it means you'll maintain a higher credit utilization ratio for a longer period of time while you wait. A large purchase might affect your credit utilization ratio—the amount of available credit you have divided by your total available credit—which, in turn, affects your credit score. If you charged $2,000 to your credit card to buy a mattress, the purchase might represent 20% utilization of your $10,000 credit limit. That's something, but not enough to hurt your scores if it's the only purchase you have on your card. But suppose you decide to use the same card to purchase another mattress before your refund posts. Then you might have a $2,000 + $2,000 = $4,000 balance. That brings your credit utilization to 40%, past the point at which this factor can start to drag down your credit scores.

Since a pending refund should be temporary, however, it might not cause much of a dip.

On the other hand, it's never a bad idea to avoid this risk in the first place by avoiding a new purchase until after your refund posts to your account. An issue with the refund might extend how long it'll take even further, or mean you can't get a refund at all. Once the refunded money is credited to your account, you'll know you have those funds available to spend—or save—for certain.

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