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How do credit card refunds work?
How to get a credit card refund or chargeback in four simple steps.
If you’re overcharged for a transaction or you didn’t get what you paid for, you can request a refund on your credit card. Merchants and businesses all have returns and credit card refund policies that you can refer to if you have any transaction issues. In some circumstances, you might also need to contact your credit card provider to get a credit card refund.
Here, we take a look at how credit card refunds work, the time limits involved and other factors to consider so that you can take the right steps to get your money back.
How can I get a credit card refund?
The credit card refund process can vary depending on the merchant and your circumstances, but generally follows the steps below.
- 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 will require.
- Organize your required documents or items. If you are returning an item for a refund, follow the requirements outlined for a mail-in or in-store return. If you are requesting a refund for some other reason, 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.
- Provide your credit card details. Present the credit card that you have used for the transaction, or give your card details to the merchant so they can process the refund.
- Sign any required documents. Fill out any return or refund documents as requested by the merchant. This is for their records and helps them verify the refund.
Safeguard yourself with return protection
Return protection is offered by credit cards, and it gives you an extended amount of time to return or exchange items in addition to the retailer’s return policies. In some instances, there may be additional costs to cardholders such as shipping when exchanging or returning items.
Qualifying Mastercard and American Express credit cards offer this protection, as well as eligible Visa Infinite credit cards.
Return protection plans for Mastercard, American Express and Visa
|Card||Eligible Mastercards||Eligible American Express cards||Eligible Visa Infinite cards|
|Duration||60 days from purchase||90 days from purchase||90 days from purchase|
|Coverage||Up to $250 per claim; maximum of 4 claims per 12 months||Up to $1,000 per claim; maximum of $50,000-worth of claims per 12 months; for losses related to natural disasters, it only covers $500 per claim||Up to $300 per claim; maximum of $1,000-worth of claims per 12 months|
|Reason for return||You aren’t satisfied with the item, and the store won’t allow you to return it||The item was stolen or accidentally damaged||You aren’t satisfied with the item, and the store won’t allow you to return it|
|What’s not covered|
|How to file a claim||Call 800-Mastercard to request a claim form||Call 800-322-1277 or visit American Express’s website to file a claim||Call 888-221-3289 to file a claim|
How long does it take for a refund to appear on a credit card?
- Credit card refunds from merchants. Refunds from a merchant can take up to seven days to process. Note that during this time the original purchase could still be listed on your account and accrue interest if you carry a balance on your credit card. You can contact individual merchants to find out how long they will take to process the refund or to request a faster refund.
- Credit card chargebacks. The transaction dispute process requires providers wait for a response from the merchant before processing any eligible credit card refunds. This means that it could take some time for a credit card refund to show up on your account — 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 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 credit card refund for nondelivery 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 make sure the claim is eligible and then guide you through the refund process. Merchants can also remove pre-authorizations that “hold” funds in your account before or after a full payment is made, such as with 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 amount of the disputed transaction. Chargebacks are done in accordance with the applicable card scheme rules set by Visa, Mastercard or American Express 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 didn’t carry out the transaction.
- Lost or stolen. If the card was used after it was reported lost or stolen.
- Faulty products. When the equipment used to process the transaction is found to be faulty.
When can’t I get a credit card refund?
There are some situations where you won’t be 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.
- Fail to report a lost or stolen card. If you don’t report a lost or stolen credit card straight away.
You might also be unable to get a credit card refund if the charges are “pre-authorized” and meet the standard practices of a merchant, like when a hotel or airline that “holds” funds for a set period of time in case of incidental charges. In this instance, you could contact the merchant to request a release of the funds, rather than an actual refund.
How to request a chargeback
Getting a credit card refund from a merchant is relatively straightforward, which is usually the first direction to take. On the other hand, the chargeback process usually involves several more steps.
- Contact your credit card provider. Explain the situation to them in detail. They may advise you to contact the merchant again before proceeding with the chargeback.
- Provide evidence of the issue. Your provider may ask you for verbal or written details of the incorrect charges and you could 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.
- Wait for a response. The credit card refund laws around chargebacks require banks to wait up to 45 days for a merchant to respond to your dispute claims. If the merchant does not respond in that time, your dispute will be approved and you’ll get your money back. If they do respond, further steps will be taken to resolve the situation. You can request updates from your provider during this time, but will have to wait it out before you can get a refund.
- Provide any further details. If the merchant accepts the dispute, your refund will be 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 within 45 days, but in some cases it could take up to 120 days for the provider and merchant to resolve the dispute.
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 chargebacks, you usually have to dispute the credit card transaction within 30–90 days of when it first appears on your credit card statement.
- Interest charges. Depending on the circumstances of your credit card refund, you may be charged interest during the refund process. But if you have lodged a chargeback claim with your credit card provider and it is approved, you should be refunded the full amount as well as any interest that was charged on it during the investigation.
- Refund payments. If money is returned to your account, the funds are considered as a credit to your account. This means a refund will 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 do apply a fee for chargebacks. Third-party payment processors such as PayPal or SecurePay may also charge additional fees for credit card refunds, with the cost typically ranging from $10–25.
Whether you need a credit card refund for nondelivery, incorrect charges or simply because you reconsider your purchases, the quickest and easiest option is to directly contact the merchant. 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 will be able to get the right kind of credit card refund in any situation.Back to top
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