Credit card refunds: How they work and how to request one
November 16, 2023 6 min read
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 that’s not always enough, so sometimes it might be worth asking your credit card issuer for assistance.
But it helps to know when and why you might do that. Here’s more about merchant refunds—and what might happen if your credit card issuer gets involved in disputes.
- If you want a refund on your credit card, it’s best to ask the merchant you made the purchase from.
- When a refund request is honored, the merchant returns the funds to the credit card issuer. Then the card issuer credits your account.
- You can check merchants’ return policies for an idea of how long your refund might take.
- Merchant refunds aren’t the same as credit card disputes and chargebacks. Chargebacks 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 the place you made your purchase.
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.
When a consumer decides to return an item, the credit card refund process typically works like this:
How long does a credit card refund take?
There’s no set answer to how long it takes for a refund to appear on a cardholder’s account. It depends on a few different 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. For a rough idea, though, many merchants show their individual return policies on their website.
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:
Review refund policies or service agreements
Before picking up the phone, it might be a good idea to visit the merchant’s website to learn about its current policies. In some cases, you might be able to avoid waiting on hold by requesting a refund online or by sending an email.
Organize the required documents
Have on hand a receipt of your purchase and a confirmation number or other type of document that proves your purchase.
Provide necessary details
It might be helpful to have your credit card nearby in case the merchant doesn’t keep card numbers on file. This is important if you’re talking to the merchant in person, on the phone or online.
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 or 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 problem, this is one step people might take next. But keep in mind, disputes and chargebacks are related to billing errors or cases where a merchant didn’t honor its terms and conditions. And 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.
Is a chargeback different from a refund?
Disputing a credit card charge is different from asking for a refund.
- Disputes and chargebacks: When you dispute a credit card charge, you’re usually asking your credit card company to correct a billing error on your account. Or you might be asking your credit card company to have a merchant revisit a charge if you believe the merchant violated its stated terms and policies. But keep in mind: During a dispute, Capital One doesn’t ask merchants to reconsider those terms and policies.
- Merchant refunds: Requesting a refund covers many situations where you want your money back, like when you’re dissatisfied with the merchant’s policies or service or when you need to cancel plans. Capital One can’t issue a refund on behalf of a merchant. Even if you charged a ticket or reservation to your Capital One card, the merchant is the one who will be able to issue a refund.
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.
If your refund hasn’t arrived by the time your credit card payment is due, you might still have to make at least the minimum required payment.
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 normally 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 just means that instead of you owing money to your credit card issuer, your credit card issuer actually owes you. You can spend down the negative balance by continuing to make purchases on the account. You might also be able to request money directly from your issuer.
How credit card refunds work in a nutshell
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, you can report it as fraud.