Credit card refund doesn't count as payment

prowla

I bought something on ebay last month.

My credit card statement arrived, with that item on it (a total of around £350, as expected).

The item didn't arrive, so I opened a dispute with ebay and the amount of that item (just over £200) was refunded to my card.

I called the credit card company to check whether the refund counts as a payment towards my current statement due amount (ie. I would only have to pay £150 this month).

They told me no; it doesn't count as a payment but instead would be a reduction in my balance against next month's statement.

Is that normal?

Vortigern

I think you'll find that it doesn't count towards the minimum payment that you must make before the due date, so if you are making minimum payments, you still need to make that payment.

If you normally pay in full, you'll just need to pay the remaining £150 by the due date.

If you normally pay the full amount by direct debit I expect they'll just take £150 but you need to read the terms and conditions regarding refunds.

bengal-stripe

prowla wrote: »

They told me no; it doesn't count as a payment but instead would be a reduction in my balance against next month's statement.

I believe that varies from card to card (seem to remember, I once had a refund with Santander which they did count).

The reason not counting is presumably that it could be open to abuse. Someone 'buys' something before the statement and gets a refund after the statement has come out. If it was counted as minimum payment, you would have paid the months minimum without spending any of your money.

In theory one could play that game for every single statement of the year.

chattychappy

This topic does occasionally come up and CCs appear to differ in their policies. I suppose there are two separate issues: what you are now required to pay (ie does the refund count against the minimum payment) and how much do you have to pay back to avoid interest (ie the full balance on the statement, or the full balance less the refunded about).

My experience (as somebody who pays the balance in full each month) is that it DOES count for both of the above. There is a logic to this: if I paid off the full balance despite the refund coming in, I would be placing the CC in credit - which is not allowed. I'm pretty certain the situation has arisen with me and I've not been charged interest by deducting the refunded amount from my payment.

On the other hand, I can understand that if you don't pay the balance in full then there is a logic in NOT allowing the refund to count against the minimum payment. Else, to take an extreme example, people could regularly make a purchase and refund it the following month as a way of avoiding paying any debt back.

Unless you are short of cashflow, to be safe, I would follow what they say.

prowla

Vortigern wrote: »

I think you'll find that it doesn't count towards the minimum payment that you must make before the due date, so if you are making minimum payments, you still need to make that payment.

If you normally pay in full, you'll just need to pay the remaining £150 by the due date.

If you normally pay the full amount by direct debit I expect they'll just take £150 but you need to read the terms and conditions regarding refunds.

Thanks.

I do normally (always!) pay in full.

But they told me that the refund would not count towards it and so I would need to pay the full £350 this month.

I said that was strange, as they've got the credit to my account sitting there, haven't they...

They did come up with a compromise, which seems a bit convoluted...

If I pay the balance minus the refund amount then they will cover my interest for this and next month, which puts me in the same position as I would have been anyway.

They said they could just do that this once.

(It's a Sainsbury's credit card.)

We're not talking vast sums of money here, but I did find it a bit puzzling.

Vortigern

Sainsbury's terms and conditions say:

"11.7 You must not make payments or transfer funds from another credit or store card to your account that would leave a credit balance on your account. We may return any funds that exceed the balance owing on your account to the account from which the money has been sent."

...but the adviser you spoke to is telling you to put the account in credit?

Ring again, speak to a different adviser, quote the above term.

All this would be avoided by using direct debit payments for the full amount in future.

bris

No your getting confused, if the credit is cleared on your account before the due date then you account will show £150 due which is what you pay.


If your due date is before the credit has cleared then you have to pay the £350 and you can request a cheque for the positive balance when the credit clears.


If your asking will it count as a payment towards your account which meets or exceeds the minimum so you don't need to pay anything on your due date then no, you must always pay at least the minimum payment.