How do credit card refunds work?
Editor's Note
Whether the jacket you loved in the store looks weird at home or you no longer need the gift you bought, you're bound to return an item you've purchased at least once in your life.
If you bought your item with cash, the cashier will refund the same amount you paid. But how do credit card refunds work?
Here's what you need to know about credit card refunds.
What is a credit card refund?
When you return an item, the merchant typically issues your refund as a store credit or returns the funds to the original payment method, depending on the store's return policy. If you choose to receive your refund via the original payment method and you paid with a credit card, you'll receive a refund to your credit card account.
Some credit cards may provide perks that extend the return window for purchased items, subject to terms and conditions. This commonly comes in the form of extended warranty protection or as a benefit for a store card.
Related: The top 7 credit cards to maximize large purchases
Can you get a refund on a credit card?
If the merchant allows a refund to your original payment method, you'll get the money on the credit card you used to make the purchase. Even if the merchant terms prevent you from receiving a refund, you may still be able to get back the amount you paid if your card has return protection.
For instance, if you paid with the Chase Sapphire Reserve® and the merchant doesn't take the item back, the card's return protection allows you to receive a credit card refund of up to $500 on an eligible item (up to $1,000 per calendar year) within 90 days of purchase.
Related: Your complete guide to shopping protections on American Express cards
How do credit card refunds work?
When you make a purchase with your credit card, you allow the credit card company to pay for your purchase, and you pay them back when you pay your statement balance.
When you make a return, the credit technically goes to the credit card issuer, and your balance will adjust when the issuer processes your credit card refund.
Here, my account shows the purchases I've made (the positive numbers) and a return that has been processed and deducted from my account balance.
However, you are responsible for paying the purchase amount if your payment is due before the refund is processed. Once the return is processed, your balance will be adjusted for the following billing cycle. If you're not sure whether a return will process in time before your statement balance is due, pay off the charge anyway, just to be safe.
Related: Can a merchant charge a fee for paying by credit card? Here’s what you should know
How long does a credit card refund take?
Credit card refunds can take anywhere from a day to a few weeks, depending on the merchant and your credit card company. If you have a significant return that you want to clear before your payment is due, make the return as early as possible.
Ideally, allow at least five business days between your return date and the end of your billing cycle to increase the chances that your credit card refund will be processed before your payment is due.
Related: How long does it take to receive statement credits from Amex, Capital One, Chase and Citi?
What happens to my credit card rewards when I get a refund?
Unfortunately, you lose the rewards you earned on a purchase when you return it. Like your account balance, your rewards balance will adjust when your return is processed.
Similar to my account balance, my rewards balance shows the returned purchase points deducted from my rewards account.
If you want to keep your rewards, you can request the merchant give you a store credit rather than a refund.
Related: Can you close a credit card with a negative reward balance?
Bottom line
When you return something you purchased with your credit card, the purchase amount is subtracted from your balance. A credit card refund can take a few days or even weeks to process, though, and you'll be on the hook for the purchase amount if your payment is due before a return is finished processing.
Related: Why nearly every purchase should be on a credit card
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| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
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Why We Chose It
There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)Pros
- 4 points per dollar spent on dining at restaurants worldwide and U.S. supermarkets (on the first $50,000 in purchases per calendar year; then 1 point per dollar spent thereafter and $25,000 in purchases per calendar year; then 1 point per dollar spent thereafter, respectively)
- 3 points per dollar spent on flights booked directly with the airline or with amextravel.com
- Packed with credits foodies will enjoy
- Solid welcome bonus
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
- $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
- $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
- Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.