Refunds and how shops deal with them

munchpot

Hi All

I know a little knowledge is always a dangerous thing but wondered if you could help me.

I'm sure I've read that when you are being refunded by a shop then, if you paid by debit card, legally you are entitled to a cash refund rather than having it paid back into your account.

I understood that only Credit Cards need to be refunded to the card as the credit card company have paid the retailer not your bank from your account.

Anyone know if I'm right or not - happy to be told I'm wrong and won't get upset.

wealdroam

You may well find that even with a debit card the retailer will want to refund to the card that was originally used.

This is because they will only get the original card processing fee, however small, back if they do that.
Their agreement with their card processor may also influence their actions, although that shouldn't impact you.

Why do you ask? Do you have a problem?

craig-diy

For shops to cover there back they will always refund back in the method which was used when first paid.... If they where to pay cash then they have no way of proving you have been given a refund as most shops will ask for a signature that will match the same as your card....

neilmcl

Unless the item is faulty then a refund is purely down to the goodwill of the retailer and is governed by their own T&Cs. In other words they can choose to refund in any way they see fit.

paddyrg

I don't believe there is any legislation covering this at all.

s_b

as a retailer i would prefer to pay back by card refund so as to cut down on the chance of staff pilfering as i would have a full audit trail

arcon5

If there is no legislation on it then could it be considered to be a contractual issue? ie if terms dictate refunds are to be made via the same method paid then they can do such

Personally I think it's a fair policy. Otherwise there could be issues with people getting cash refunds then initiating chargebacks. That and they will of course want their payment processing fees refunded.

unholyangel

OFT's website (about SoGA explained):
http://www.oft.gov.uk/business-advice/treating-customers-fairly/sogahome/sogaexplained

Says this:

Methods of payment when a customer is entitled to a refund
The following points provide a brief overview of the law relating to how refunds can be given.
If a customer who is entitled to a refund as a result of faulty goods
paid by credit card - you can insist that the refund is to the credit card used for the payment. This is because the credit card company paid you originally, and therefore you are entitled to refund them, not the customer directly
paid by debit card - it is our view that you can offer to make the refund to the debit card used to make the purchase. Alternative methods of refund, for example cheque or cash, can be offered and may be requested by the customer
paid by cash - methods of refund can be cheque or cash.

sweep9

Most card merchants insist that retailers refund all cards payments (debit and credit) back onto the original card.

If you did give cash back for debit card sales, if a cardholder is aware of the retailers floor limit and makes purchases below this limit, they could be defrauding the account by getting cash.

This is covered as an example by the Barclaycard merchant guide under numerous sections including 3.2.6

CoolHotCold

As others have said, there is no legalisation that lays out the law on refund methods.

But generally it is back to the same card that was purchased as it is the one sure way the Retailer is dealing with the original consumer (as per the SoGA), and the consumer shouldn't have a problem with this.

Fosterdog

Where I work if I process a refund and original payment was by card then the till software will only allow a refund to card or a gift card there is no way within the software to open the till for a cash refund if card was the method of payment. The same goes for a gift card, they can only be refunded to a gift card.