Credit card refunds
Credit cards can be a convenient way to manage your money. But what if you pay for something with your credit card and the company goes bust or doesn’t deliver what it promised? Can you get a credit card refund?
Here’s what you need to know about credit card refunds, how the process works and what protection you might get.
Credit cards can be a convenient way to manage your money. But what if you pay for something with your credit card and the company goes bust or doesn’t deliver what it promised? Can you get a credit card refund?
Here’s what you need to know about credit card refunds, how the process works and what protection you might get.
What is a credit card refund?
When you pay for something using your credit card and there’s a problem with your purchase, a credit card refund could reimburse the money paid.
You could get a credit card refund directly from the retailer. Or, if that fails, you could claim a refund from your credit card provider, thanks to Section 75 credit card purchase protection.
How do refunds work on credit cards?
To understand credit card refunds, it’s important to understand how credit card payments work.
When you use your credit card, technically you’re not spending your own money. You’re borrowing money from your credit card provider, who pays the vendor on your behalf.
Your credit card provider will then add the amount to your credit card balance, which you’ll pay off in full, or partially, each month.
The process of a credit card refund works in reverse. If your credit card refund is successful, the money is returned to your credit card provider, not you.
Your credit card provider then takes the amount refunded off your monthly balance. That reduces the amount you owe them.
How to get a credit card refund
Claiming a refund for something you bought with a credit card can be fairly straightforward, unless it’s disputed. Here’s a step-by-step guide on how to claim refunds on credit cards:
Contact the vendor
When claiming a refund for something you paid for with your credit card, start by contacting the vendor. Most retailers have a returns policy and may be happy to give you a refund straight away if you have a problem with your purchase.
If you used your credit card in a shop, you should return to the retailer with the item and its original packaging, your credit card and receipt. If you don’t have the receipt, a credit card statement showing the transaction should do.
If you used your credit card online, the vendor should have a returns and complaints procedure on its website. If you want to write to the vendor, Citizens Advice has a template letter you could use.
Make sure you keep a record of all correspondence between you and the vendor.
Get your credit card refund
If the vendor agrees to your request, they’ll refund the money directly back to your credit card provider. It’s unlikely you’ll get a cash refund because your own money was never actually used during the transaction.
As soon as your credit card provider receives the refund, they’ll credit your account, which will reduce your outstanding credit card balance.
If the vendor refuses to give you a refund
If the vendor ignores your request or refuses to give you a refund, you may still be able to get your money back. These are the steps to take:
- Write to your credit card provider, or contact them via the website or app, and tell them that you want to claim a credit card refund, either through Section 75 or Chargeback.
- Give details of the purchase, including the date and amount of the purchase, and what went wrong.
- Detail any action you’ve taken to get a refund directly from the vendor and how they responded.
- If your credit card provider agrees with you and your case is successful, they’ll refund the money to your credit card account.
What are the different methods for credit card refunds?
There are different ways a credit card refund can be made, depending on the details of your claim.
Section 75 claims
If you use your credit card to buy something that costs over £100 but not more than £30,000, you may be protected by Section 75 of the Consumer Credit Act. This means the credit card provider has equal liability with the vendor if there’s something wrong with your purchase.
If the vendor refuses to give you a refund or has gone bust, you should contact your credit card provider. Tell them you want to make a claim under Section 75 of the Consumer Credit Act.
Your credit card provider is legally obliged to look into your case and, if they agree with you, issue a refund.
Chargeback claims
If your purchase doesn’t qualify for Section 75 – for example, because it’s £100 or less – you may be able to get a refund or part-refund through Chargeback.
Unlike Section 75, Chargeback is not a legal right. It’s an agreement that Visa, Mastercard and American Express have signed up to.
With Chargeback, your card provider can try to get the money back by reversing the transaction. You’ll need to provide evidence to support your claim.
And be aware there are time limits for claiming a credit card refund when using Chargeback. Your credit card provider usually needs to start a Chargeback claim within 120 days of you making the purchase, or from the time you were due to receive the goods or service.
The Chargeback process can be a lengthy one and there’s no guarantee you’ll get your money back. But if you haven’t heard back from your credit card provider within eight weeks, you can complain to the Financial Ombudsman.
Store credit as an alternative to a credit card refund
If you’re returning an unfaulty product because you’ve simply changed your mind, high-street stores aren’t legally obliged to give you a refund. However, they may offer you a gift voucher or credit note as a ‘goodwill’ gesture.
Most retailers impose time limits on when you can return non-faulty goods – usually within 28 days of making the purchase. Check the store’s returns policy to be sure – it may be written on your receipt or detailed on its website.
The store’s return policy should say if vouchers or credit notes are given as an alternative to a refund. But it can only apply this to items that are unwanted and unfaulty.
Cooling-off period when shopping online
If you buy something online from a UK retailer using your credit card, you may be entitled to a 14-day cooling-off period. This could help you get a refund if you buy something online, then decide you don’t want it when it arrives.
This cooling-off period may not apply to some online purchases, such as:
- Products that are bespoke, personalised or made to measure
- Perishable products, like food or flowers
- Items bought from a private seller on sites like eBay and Facebook Marketplace
- Audio, video or computer software, if you’ve broken the seal on the wrapping
- Items that have broken hygiene seals
- Goods bought from overseas.
The online retailer should let you know if the item you’re buying doesn’t include a cooling-off period.
If you want to send something back, you’ll normally need to let the retailer know within 14 days of receiving your purchase. You then typically have another 14 days to send it back.
If the item arrives back and is undamaged, the online retailer should issue a credit card refund within, you guessed it, 14 days of receiving your return.
What should I consider when pursuing a credit card refund?
There are some situations when getting a credit card refund may be a little more complicated.
Mixed payment methods
If you use your credit card to make a part payment on something, then pay the rest with a debit card or cash, you may still be able to use Section 75 to get a refund. Section 75 should still apply, as long as the total cost of the good or service is more than £100 and less than £30,000.
Let’s say you buy something for £300. You use your credit card to pay a £30 deposit, then pay the rest in cash. You may be able to claim a refund for the entire £300 under Section 75 if the goods were faulty or didn’t arrive.
If you split the cost of something between two credit cards, you can only claim Section 75 on one of the cards, not both.
Third-party purchases
You might not be protected by Section 75 if you bought something on your credit card via a third party, such as Amazon Marketplace, Paypal, eBay or a travel agent.
If your credit card provider refuses your claim under Section 75, you could ask it to use Chargeback instead. However, there’s no guarantee you’ll get your money back.
Second cardholders
Only the main cardholder (the person who signed the credit agreement) can make a Section 75 refund claim. This means any refund claims for purchases made by a second cardholder are likely to be rejected by the credit card provider.
You might be able to claim if it was a joint purchase, such as a family holiday, or it’s something for the main cardholder – for example, a birthday present.
Ask your credit card provider what rules apply to second cardholders before you start a claim.
Did you know?Although you won’t be protected by Section 75, third-party retail sites like Amazon usually offer their own payment protection plans. For example, with Amazon’s A-Z Guarantee, if you buy from a Marketplace seller and something goes wrong, you can make a claim directly to Amazon. Its team will determine if you’re eligible for a refund. |
How long does a credit card refund take?
If the vendor accepts your request, a credit card refund usually takes between three and 10 days to reach your account. Most retailers will refund you instantly, while some may take longer. It also depends on your credit card provider and its refund procedure.
However, credit card refunds can take a lot longer if your claim is disputed. Some billing and fraud disputes can take several weeks or longer to resolve.
Your credit card provider should keep you in the loop. If it doesn’t respond to your claim within eight weeks or you don’t get an adequate response, you can take your case to the Financial Ombudsman.
What should I do if my claim isn’t successful?
If you’ve tried all means to get a credit card refund without success, as a last resort you could take your case to the Financial Ombudsman. However, there’s still a chance you won’t get your money back.
The Financial Ombudsman Service (FOS) offers a fair, impartial and free service to help settle disputes between consumers and businesses. It will examine your case from both sides before making a decision.
What do I do if I’m not happy with the ombudsman’s decision?
Most cases that end up in the FOS inbox are dealt with by an assigned case worker. They investigate your complaint and make a decision based on the evidence provided.
If you’re not happy with the decision, you can ask the matter to be referred to an official ombudsman at the FOS. They can review how your complaint was handled and give a final decision on your case.
If you’re not happy with the ombudsman’s final decision, you may still be able to take the matter to court. However, it’s worth noting that the court will likely take the ombudsman’s decision into account.
How do credit card refunds affect my credit?
A credit card refund doesn’t count as a payment, so it shouldn’t affect your credit score. But it might affect your credit utilisation ratio – in other words, how much of your credit card limit you’ve used.
A refund may lower your credit utilisation ratio, which can be a good thing. Keeping your ratio low could prove to lenders that you’re being careful with your spending. It might get you a lower interest rate if you’re borrowing in the future.
Looking for a credit card?
We can help you compare credit cards quickly and easily. Simply filter your choices by card type to help you find a credit card deal to suit your needs.
Use our credit card eligibility checker to find out which cards you’re likely to be accepted for without affecting your credit score.
Compare credit cardsCompare the Market Limited acts as a credit broker, not a lender. To apply you must be a UK resident and aged 18 or over. Credit is subject to status and eligibility.
Frequently asked questions
What happens when you get a refund on a credit card with zero balance?
If you’ve paid off your credit card in full and have no outstanding balance, your credit card statement will show a ‘negative balance’ if you receive a credit card refund.
A negative credit card balance means your account is in credit. In other words, your credit card provider owes you money, instead of the other way around.
What happens if my refund is sent to a cancelled credit card?
If your credit card has been cancelled, your credit card provider should send you a cheque for the amount you’re owed. By depositing the cheque, you can transfer a credit card refund to your bank account.
If your credit card was cancelled but still has a balance owing on it greater than the refund, then a refund won’t be issued.
If your card has expired but you have a new card with the same credit card provider, it should be able to redirect the refund to your new card.
Do you have to use the same card for a refund?
Yes, you can only receive a credit card refund on the card that was used to make the payment. You can’t ask the refund to be sent to a different debit or credit card account.
Do credit cards offer more protection than debit cards?
Credit cards can offer more protection than debit cards for certain purchases over £100 and under £30,000. Unlike credit cards, debit card payments aren’t protected by Section 75. Debit card payments may be covered by Chargeback, but unlike Section 75, this protection is not law.