Payment refund help

alpha1_2

Hi,
I bought a item off the internet but returned the item and was refunded back onto my credit card. It shows up on my statement and thought it can be used as payment for my credit card but my credit card company says no and they tried to explain how it works but I got more confused so can anyone else explain it a little better on how my refund gets back to me?

Thanks

Tim_L

When a transaction is refunded, it is as if it never happened at all. The amount coming in just cancels out the amount going out and does not go to reducing your balance.

So if you have a balance on your card you still also need to make your normal monthly payment. The refund doesn't count towards this.

This is obvious really: otherwise people would just make a purchase of a value equal to their payment every month then have it refunded.

Galstonian

I believe Nationwide count refunds as payments (at least they have for me in the past) but I don't think any other card issuers do.

deemy2004

Capital one counts refunds as payments - well for me anyway, maybe it depends if its within the current statement period or the refund is on the next statement ?

MarkyMarkD

When a transaction is refunded, it is as if it never happened at all. The amount coming in just cancels out the amount going out and does not go to reducing your balance.

So if you have a balance on your card you still also need to make your normal monthly payment. The refund doesn't count towards this.

This is obvious really: otherwise people would just make a purchase of a value equal to their payment every month then have it refunded.

It's not obvious, really, Tim.

If you have a clear credit card account, and make a £500 purchase on 1 March which is the sum total of your March statement on 31 March, and the transaction is then refunded on 1 April, you DO NOT OWE THEM ANYTHING.

But the more stupid credit card companies expect you to pay your full balance on the March statement to avoid charges.

But if you do that, your account is then £500 in credit. D'oh!

So they penalise you because you bought something which was duff and then got refunded.

Tim_L

At which point you simply call them and ask them to send a cheque or BACs transfer for the excess, or else use the balance to spend the next month. This doesn't happen unless the refund and payment are on different statements in any case, in which case when the bill was sent the money was owed.

I suspect also that a call to customer services once a refund taking the balance to zero had credited (if this happened before the payment date) would sort this out fairly quickly without the need for an additional payment.

Perhaps I should have said this practice was reasonable rather than obvious. It would clearly be dangerous to allow people to use refunds as partial or minimum payments because it wouldn't actually clear the underlying debt at all. This may well lead to odd situations with payments, but I certainly wouldn't characterise the practice as stupid.

faddy

Barclaycard count refunds as payments. In my experience most cards do, but I shan't list any more without checking.

alpha1_2

Hi,

I agree with MarkymarkD it is silly because of the confusion of my last statement they slapped me with a £25 late fee! I called them up and they took the fee off but now I still pay the £25 fee but this will be credited back onto my account on my next statement!

Thanks for the replies I understand how it works now you been all helpfull!