How do credit card refunds work?

What is a credit card refund?

When you return a purchase you made on a credit card, you won’t get the money back in cash. Instead you’ll receive credit for the same amount as the item you’ve returned.

For example, if you buy a sofa for £1,000, then return it, your credit account will be issued £1,000 after the return. This is the case even if you’ve already paid off the credit when you decide to return your purchase.

Let’s take a closer look at how credit card refunds work.

How credit card refunds are issued

To understand credit card refunds, you should first understand how credit card payments work.

When you buy something on your credit card, your credit card issuer pays the vendor for you. This amount will then show as credit on your account, indicating how much you owe.

A refund is the same process in reverse. So when the vendor agrees to a refund, the money is returned to the credit card provider, who will then amend the balance on your card.

As no real money was ever paid by you in the buying process, you won’t get the offer of a cash refund, even if you paid back the credit before deciding to return your purchase.

How long does a credit card refund take?

Getting a refund on a credit card can take up to ten working days, and can vary depending on the shop you bought from. For M&S customers, we suggest you wait at least ten working days before enquiring about your missing refund.

Of course, if there’s a dispute over your request to refund, this process can take a little longer. If you’re an M&S Bank customer and need support with a refund dispute, visit our unrecognised transaction page for tips to help you identify a transaction and support on what to do next.

Do credit card refunds affect your credit?

A credit card refund doesn't count as a payment or partial payment. This means that it shouldn’t affect your credit score. Even if you go into a negative balance as a result of a late refund, this shouldn’t be reported to credit agencies.

Getting a refund on a credit card should be a fairly simple process. But if you need help along the way, M&S banking support are always happy to answer your questions.

Published October 2022

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