Ever go overboard when shopping, then feel guilty when you get home with your haul? (Me, neither.) Or maybe that button-down you bought your brother doesn’t fit him, or the rug you bought doesn’t match the living room paint when you see it in place.
In most cases, you can return the item and get your money back, as long as the retailer’s policy allows it and you’re within the time window permitted for returns.
But if you paid for the purchase using a rewards credit card, what happens to your points when you get a refund? Well, you'll probably be returning those, too.
Rewards and returns
When your credit card gets refunded for your return, the points, miles or cash back you earned on that purchase will be subtracted from your rewards balance. That includes any bonus rewards you may have earned.
Let’s say you bought a TV at Walmart with your Chase Freedom Flex℠ in late December 2020, when Walmart was a quarterly bonus category on the card. You earned 5% cash back for the purchase instead of the usual 1%. Now say it's a couple weeks later, in January 2021, and you return the TV. All the cash back you earned from the purchase will be subtracted from your rewards balance — the whole 5%, even though Walmart is no longer a 5% category.
The credit for your refund will probably appear on your credit card account within days, but you might not see the rewards disappear immediately. It might not happen until your monthly statement closes.
Many credit card issuers now have targeted offers that can be added to your card like a coupon, where you get an automatic statement credit for spending a certain amount at a specific retailer. If you’ve taken advantage of one of these deals, such as a Chase Offer or Amex Offer, that statement credit will likely be reversed when you refund the purchase. That's on top of losing the rewards you earned for the purchase itself.
There is one way you can hold onto the rewards you earned for a purchase even after making a return: Get store credit rather than having a refund applied to your card. As far as your issuer is concerned, the money is still being spent at that retailer, so the rewards are yours to keep.
Of course, your money will then be tied up at that store. If it's a place where you shop regularly, you'll have plenty of opportunities to make use of the store credit. If not, you probably won't want to be stuck with credit there instead of getting your money back to use elsewhere. In that case, it makes sense to let go of the rewards.
Having rewards disappear because of a refund can be a bummer. But if a refund causes you to drop below the spending requirement for a big sign-up bonus, it can be downright disastrous.
Let’s say you get a new Chase Sapphire Preferred® Card, which offers this bonus for new cardholders: Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 toward travel when you redeem through Chase Ultimate Rewards®. You put all your spending on the card to hit the requirement, and you get it in just under the wire.
Then, you decide to return a couple pairs of jeans you bought on a whim. The $100 refund hits your credit card, and when the statement closes, you’re $100 short of the required amount, so you don't get a bonus.
Perhaps worse, a bonus could even be revoked after it’s awarded. If you meet the spending requirements on the new credit card and claim the bonus, but later return a purchase that put you over the top, the issuer can take back the bonus points you’ve been awarded. If you’ve already redeemed the points, you’ll see a negative points balance on your statement. All the rewards you earn on the card would go toward "paying back" the bonus, and it could be a long while before you're back in the black.
After your credit card is refunded, you'll see any points, miles or cash back you earned from your initial transaction removed from the balance in your rewards account. In some cases, rewards may disappear immediately, but in other cases, your rewards balance might not change until your billing cycle is up.
If you refund a purchase on your Card, we will remove any points earned for the original purchase from your Points Account. If your Earn Rate changes, the new Earn Rate will apply to refunds regardless of the original Earn Rate for the purchase. This may result in a negative points balance.
Will I receive my points back if I get a refund from the merchant? If you choose to later return your purchase for a refund, the Membership Rewards points that you redeemed through SafeKey for a statement credit will not automatically be credited back to your Membership Rewards account.
With all of the major card issuers, if you cancel a credit card that earns flexible rewards, you lose any unredeemed points or miles. However, some programs give you a grace period to redeem points even after you close your card. Here are the policies from the terms and conditions of some of the major programs.
In most situations, returns on credit cards will cause you to lose any points, miles or cash back your purchase accrued. Rare exceptions occur where you may be able to keep your rewards, such as returning items for store credit or exchanging your return for an item of equal or greater value.
Will I lose my reward points if I make a return? The reward points earned through the purchase will be deducted from your point earnings (which can include bonus points) once the transaction has posted to your account.
If an account was canceled in error, you will not lose your points. But if your card is canceled due to inactivity, you must use your points within 90 days if you don't want to forfeit them.
If you try to return an eligible item within 90 days from the date of purchase and the merchant won't take it back, American Express may refund the full purchase price excluding shipping and handling, up to $300 per item, up to a maximum of $1,000 per calendar year per Card account, if you purchased it entirely with ...
Credit card refunds don't count as payments toward your monthly bill. Instead, they're added to your account as a statement credit. If your refund has not been credited back to your account by the time your credit card bill is due, you'll still have to at least make the minimum credit card payment.
Why did you still charge my Card even though I used Membership Reward points? Even though you used Membership Rewards points, the full purchase amount will still be charged to your Card account and will appear on your next Card statement. You must continue to pay all amounts due on your Card account as per usual.
Policy: Membership Rewards points are immediately forfeited when you cancel a card and don't have another card that earns Membership Rewards points associated with that account.
If you can avoid closing a credit card, or if you don't really need to close a card, you're almost always better off leaving your account open. This is especially true if you're trying to improve your credit score or at least not hurt it, and if you have a rewards balance you haven't yet used.
But our editorial integrity ensures our experts' opinions aren't influenced by compensation. Terms may apply to offers listed on this page. Credit card points may lose value if you don't use them, as redemption options can change. If your credit card is closed for any reason, you could lose all your unused points.
Credit card refunds don't directly impact your credit score, but if you receive a credit that significantly reduces your credit utilization rate to under 30%, it could boost your score.
Credit card refunds don't count as payments toward your monthly bill. Instead, they're added to your account as a statement credit. If your refund has not been credited back to your account by the time your credit card bill is due, you'll still have to at least make the minimum credit card payment.
Any PC Optimum Points® earned as part of the original purchase will be deducted from the account associated with the PC Optimum® Member's card number that was used for the original purchase (whether or not the PC Optimum Card® is presented at the time of return and/or exchange).
Do refunds count as credit card payments? Refunds don't count as payments toward your monthly bill. They're credited to your account and will show up as statement credits. If your refund hasn't arrived by the time your credit card payment is due, you might still have to make at least the minimum required payment.
Introduction: My name is Arline Emard IV, I am a cheerful, gorgeous, colorful, joyous, excited, super, inquisitive person who loves writing and wants to share my knowledge and understanding with you.
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