Even though using a debit card for purchases doesn’t add to your debt, it’s often best to use a credit card for big-ticket purchases. That’s because if something goes wrong and you want a refund, it’s incredibly easy to reverse a credit card charge. Here’s everything you need to know about getting a credit card refund.
When you purchase something using a credit card, you basically agree to buy the item now but pay later when your credit card statement comes. The merchant, however, gets paid immediately by your credit card company. As a result, if you decide to return your purchase, the merchant does not refund the money to you directly; it gets put back on your credit card account.
Typically, all you need to complete a refund on a credit card is the receipt for the purchase and the credit card used. Then, the merchant will reverse the charge, and the refund will be posted to your credit card account. How quickly that refund will be posted is an open question. Spending money on a credit card is practically instant, but getting it back is slower.
There are no legal rules in Canada around how long refunds take to process. It depends on the individual merchant’s refund policy. Refunds can take between two and 90 days, but normally take three to five days. If they take longer, you can’t communicate with the merchant, or the refund is disputed, you can dispute the charge with your credit card company and initiate a chargeback, as explained below.
There are two types of refunds:
This is the type of refund described above where you bring your item, receipt and credit card back to the store, and the merchant initiates the refund right in front of you. (If the purchase was made online, contact the merchant to find out how they handle returns and refunds.)
If the merchant doesn’t agree to issue a refund, you can dispute the transaction with your credit card company. This will begin the process of refunding all or part of the transaction through a credit card chargeback. Typically, your card provider will give the merchant 30 days to respond and, if they don’t, the transaction will be reversed. In a case like that, the merchant’s bank will likely charge the merchant a steep financial penalty for having to return the money.
Available online or in-store, a merchant’s refund policy will let you know under what circumstances you can request a refund. Read this ahead of time, so you know if it’s worth pursuing or if you need any documentation before approaching the merchant.
Make sure you bring the item in question along with your receipt and any other evidence supporting your case for a refund, including fine print, terms and conditions or e-mail chains.
Present the credit card you used for the transaction, the receipt and any additional evidence or documents to the merchant. Ask for a secure way to provide your credit card details online or by phone, if necessary.
Sign any refund verification documents for the merchant’s records and ask for copies for your records.
If the merchant won’t honour a refund, contact your credit card company and ask to dispute a charge and follow their instructions to initiate a chargeback.
Aaron Broverman has been a personal finance journalist for over a decade. His work has appeared on such outlets as Yahoo Finance Canada, Bankrate and Creditcards.com, Money Under 30, Wealth Rocket, CBC.ca and Greedyrates.ca. This former Toronto transplant via Vancouver now lives in Waterloo with his wife and son. When he’s not writing about your money and how to use it, you’ll find his nose in a comic book relating to the work life balance of Spider-Man and the clumsy brute strength of The Hulk.