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How do credit card refunds work?

Getting a credit card refund or chargeback.

If you’re overcharged for a transaction, or you didn’t get what you paid for, you can request a refund to your credit card. In some circumstances, you might also need to contact your credit card provider to get a refund.

Here, we take a look at the type and timeline for credit card refunds, how they work, and other factors to consider, so you can take the right steps to get your money back.

Refund taking a while? Pay your bill anyway

A credit card refund usually takes a few days to process, so don’t worry if you don’t see it on your account statement immediately. If you receive a bill during this period, pay the balance anyway. Doing this prevents you from accruing interest and results in a credit to your account. If you are worried that the refund isn’t being processed, you can call the bank.

How to contact your bank to request a refund

If you need to request a refund on your credit card, you should contact your card issuer as quickly as possible. You can find the contact details for most of the major banks and card providers in New Zealand below:

American ExpressVaries per card. Click here for contact information.
ANZ0800 658 044 Mon-Fri: 8am-8:30pm Sat-Sun: 9am-5pm
ASB0800 100 600 Mon-Fri: 8am-8pm Sat: 8:30am-5pm
BNZ0800 275 269 Mon-Fri: 8am-8pm Sat: 9am-6pm
The Co-operative Bank0800 554 554 Mon-Fri: 8am-8pm Sat-Sun: 9am-5pm
Farmers 0800 990 077 Mon-Wed: 8:30am-6pm Thu-Fri: 8:30am-9pm Sat-Sun: 9am-6pm
Flight Centre0800 500 450 Mon-Wed: 8:30am-6pm Thu-Fri: 8:30am-9pm Sat-Sun: 9am-6pm
Gem0800 500 505 Mon-Fri: 10:30am-6:30pm
Kiwibank0800 521 521 Mon-Thu: 7am-9pm Fri: 7am-8pm Sat-Sun: 8am-4:30pm
Q0800 119 100 Mon-Wed: 8:30am-6:00pm Thu-Fri: 8:30am-9pm Sat-Sun: 9am-6pm
TSB0800 872 226 Mon-Fri: 8am-7pm Sat-Sun: 9am-5pm
Warehouse Money0800 801 808 Mon-Fri: 8:30am-7pm Sat-Sun: 9am-5pm
Westpac0800 888 111 Mon-Fri: 7am-8pm Sat-Sun: 8am-5pm

What are the types of credit card refunds?

There are two main ways to get a credit card refund, which we’ve outlined in detail below:

  • Point of sale or merchant refunds. If you want to return a purchase, find you have been incorrectly charged or want a refund for the non-delivery of items you’ve paid for, your first step should be to contact the merchant. The representative you speak to will refer to the credit card refund policy to ensure the claim is eligible and then guide you through the refund process. Merchants can also remove pre-authorisations that “hold” funds in your account before or after full payment is made (think hotel bookings).
  • Chargebacks. If the merchant does not agree to reverse the credit card transaction, you can dispute it by requesting a “chargeback” through your credit card provider. This type of credit card refund involves the bank reversing all or part of the disputed transaction. Chargebacks are done following the applicable card scheme rules set by Visa, Mastercard or American Express pre-authorisations and often take longer to process than merchant credit card refunds.

    When can I get a credit card refund?

    There are many instances when you can get a credit card refund, either through the business or your credit card provider, depending on the circumstances. Some of the most common scenarios include:

    • Multiple transactions. When the same transaction is charged to your account more than once.
    • Returned items. If you return an item to the merchant and meet the return policy requirements.
    • Incorrect transaction. If it is clear that you did not carry out the transaction.
    • Lost or stolen. If the card was used fraudulently after it was reported as lost or stolen.
    • Faulty products. When the equipment used to process the transaction is found to be faulty.

    When can’t I get a refund?

    There are some situations where you aren’t eligible for a credit card refund. These include:

    • Don’t meet return policy. If you return an item to a merchant but don’t meet the return policy requirements, for example, the item is worn.
    • Shared credit card details. If you have shared your credit card or credit card details with other people.
    • Failed to report a lost or stolen card. If you don’t report a lost or stolen credit card immediately.

    You might also be unable to get a credit card refund if the charge is “pre-authorised” and meets the standard practices of a merchant (i.e. a hotel or airline that “holds” funds for a set period of time in case of incidental charges). In this instance, you can contact the merchant to request a release of the funds rather than an actual refund.

    woman complaining

    How do I get a credit card refund?

    The credit card refund process can vary depending on the merchant and your circumstances but typically follows the steps below.

    1. Contact the merchant. Get in touch with the merchant involved in the transaction and let them know you want a refund. Make sure you explain the reason for the refund and ask if there are any specific details they require.
    2. Organise your required documents or items. If you are returning an item for a refund, follow the requirements outlined for postage or an in-store return. If you are requesting a refund for another reason, you need to provide the merchant with supporting documents. For example, you may need the original receipt or credit card statement details that show you have been incorrectly charged.
    3. Provide your credit card details. Present the credit card that you have used for the transaction, or securely give the merchant details of the card (if over the phone or online), so they can process the refund.
    4. Sign any required documents. Carefully read and fill out any return or refund documents as requested by the merchant. This is for their records and helps them verify the refund.

    How can I request a chargeback?

    Getting a credit card refund from a merchant is relatively straightforward, which is why it’s usually the first port of call. The chargeback process may involve a little effort:

    1. Contact your credit card provider. Explain the situation to your card issuer in detail. They may advise you to contact the merchant again before proceeding with the chargeback.
    2. Provide evidence of the issue. Your provider may ask you for verbal or written details of the incorrect charges, and you may have to fill out a credit card dispute form. Provide as much information as possible, including statements, receipts and any other details about your contact with the merchant.
    3. Wait for a response. Merchants typically have a set period in which to reply. If the merchant does not respond within that timeframe, the dispute may be approved, and you’ll get your money back. If they do respond, further steps are taken to resolve the situation. You can request updates from your provider during this time, but you have to wait it out before you can get a refund.
    4. Provide any further details. If the merchant accepts the dispute, your refund is processed as usual. If they reject it, your provider may ask for further details until the situation is resolved. Most credit card providers aim to provide an outcome as soon as reasonably possible, but it can still take months for a provider and merchant to resolve a dispute.

    How long does a credit card refund take to show up on Internet banking?

    • Credit card refunds from merchants. Refunds from a merchant can take from 2 up to 90 days to be processed, although the average is about 5 business days. It’s important to note that the original purchase could still be listed on your account and accrue interest if you carry a balance on your credit card during this time. You can contact individual merchants to find out how long they take to process the refund or to request a faster refund.
    • Credit card chargebacks. The transaction dispute process may require providers to wait for a merchant’s response before processing any eligible credit card refunds. These measures mean that the time it takes for a credit card chargeback refund to show up on your account varies and could be anywhere from a week to several months. During this time, your credit card provider may freeze interest charges on the disputed amount or increase the funds available on your account. Check with your specific provider to find out more.

      What are the other factors to consider when requesting a credit card refund?

      • Time limit. Merchants outline the amount of time you have to legitimately request a refund, so check individual policies before making any transactions. For example, you may have to dispute a charge within 30 days of it first appearing on your credit card statement.
      • Interest charges. Depending on your credit card refund circumstances, you may be charged interest during the refund process. However, if you have lodged a chargeback claim with your credit card provider and it is approved, they should refund the full amount plus any interest charged on it during the investigation.
      • Refund payments. If money is returned to your account, the funds are considered a credit. A refund does not count as a payment towards your balance if you need to pay the minimum amount due for the statement cycle.
      • Credit card refund fees. While there shouldn’t be a fee for refunds processed by a merchant, some banks apply a fee for chargebacks. Third-party payment processors such as PayPal may also charge additional fees for credit card refunds, with the cost typically ranging from $10 to $25.

        Whether you need a credit card refund for non-delivery, incorrect charges or simply a change of mind on your purchases, the quickest and easiest option is to contact the merchant directly. If that doesn’t work, you can dispute the transaction through your credit card provider to get a chargeback. By understanding more about these two options, you can pursue the right kind of credit card refund in any situation.

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