Credit card refunds: How they work and how to request one
You never know when you might need to request a refund on a credit card. The quickest way to get one is to work directly with the business. But in some cases, you may also need to ask your credit card issuer for assistance.
Find out when and why you might do that and what might happen if your credit card issuer gets involved in disputes.
What you’ll learn:
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To request a refund on a credit card purchase, contact the merchant you made the purchase from.
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When a refund request is honored, the merchant returns the funds to the credit card issuer and the card issuer credits your account.
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You can check merchants’ return policies for an idea of how long your refund might take.
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Merchant refunds aren’t the same as credit card disputes and chargebacks, which are often related to billing errors and fraud.
How does a refund on a credit card work?
When you need a credit card refund, the best place to start is with the merchant.
You can contact the merchant and explain your situation. If the merchant agrees to the refund, you’ll get a credit to your account.
It might take some time for the credit to show up on your account. Some refunds show up immediately, while others show up days later.
The credit card refund process typically works like this:
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The merchant sends the funds from its bank, called the acquiring bank, to a credit card network.
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The credit card network routes the refund to the credit card issuer.
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The issuer credits the cardholder’s account for the returned amount.
How long does a credit card refund take?
Many merchants show their individual return policies on their websites. Reading the policy can give you a rough idea of how long a refund may take. Five to 14 days is typical, but there’s no universal timeline. It depends on a few factors, like whether you ship the item back to the merchant or return it in person and where you are in your credit card billing cycle.
If your billing cycle ends while your return is being processed, the return will likely be reflected on the following month’s credit card statement.
How do you request a credit card refund?
Working directly with the merchant can be the fastest way to request a refund. Here are some steps you might take:
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Review refund policies and service agreements. Visit the merchant’s website to learn about its current policies. You might be able to request a refund online or by sending an email.
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Organize the required documents. Find your receipt, confirmation number or other proof of purchase.
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Provide necessary details. Have your credit card nearby in case the merchant doesn’t keep card numbers on file. This is important whether you’re talking to the merchant in person, on the phone or online.
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Wait for the merchant. The merchant should let you know if you’re eligible for a refund based on its terms and conditions. If the company approves it, wait a few days for the refund to complete.
- Follow up if needed. If you don’t see anything after 14 days, reach out to the merchant again. If that doesn’t solve the issue, contact your credit card issuer to see what your next steps might be. There’s a chance your card issuer might start the process of a chargeback.
Chargeback vs. refund: How they differ
Chargebacks involve disputing a charge with your credit card company. If talking to the merchant directly doesn’t solve the issue, this may be the next step. But keep in mind that disputes and chargebacks are related to billing errors or cases where a merchant didn’t honor its terms and conditions. Credit card issuers can’t issue refunds on behalf of merchants.
According to the Fair Credit Billing Act, you have the right to dispute charges as long as the dispute is made within 60 days of the charge appearing on your credit card statement. Your credit card issuer then has up to 90 days to resolve the dispute.
Credit card refund FAQ
Here are some answers to common questions about requesting a credit card refund.
Do refunds count as credit card payments?
Refunds don’t count as payments toward your monthly bill. They’re credited to your account and will show up as statement credits.
Do credit card refunds affect your credit?
Whether credit card refunds affect your credit depends on the amount charged to your card, your overall credit use and your payments. Getting a refund could lower your credit utilization ratio, one factor used to calculate credit scores. According to the Consumer Financial Protection Bureau, experts recommend keeping your credit utilization below 30% of your total available credit.
Do refunds affect credit card rewards?
If you get a refund on your card, any rewards you earned from the original purchase will typically be removed from your rewards balance.
Why did my credit card account go negative after receiving a refund?
If you pay off your balance before getting a refund or if the refund is more than your current balance, that refund would result in a negative balance on your account. This means that instead of you owing money to your credit card issuer, your credit card issuer owes you. You can spend down the negative balance by continuing to make purchases on the account.
Key takeaways: Credit card refunds
In most cases, initiating a return with a merchant is a straightforward process. But if you believe there’s a billing error with a charge on your Capital One credit card account, the information on Capital One’s disputes support page may be helpful. And if you see a suspicious charge that you have not authorized, you can report it as fraud.
