What happens if you need a credit card payment refund?
Buying things on a credit card can be a sensible decision, because it gives you more protection than debit card if things go wrong, like your item doesn’t show up or is faulty.
Regardless of how you pay for an item, you’re entitled to a full refund on faulty goods within 30 days. After 30 days, you’re entitled to a repair or replacement for up to 6 months.
If you’ve just changed your mind, you don’t have a right to a refund under the Consumer Rights Act, although many retailers offer refund or exchange within a certain time limit as part of their returns policy.
But what happens if the retailer’s gone bust or won’t respond? If you paid with a credit card, there’s extra protection. Our guide explains why, and how to make a claim.
Why are credit card refunds different?
One of the main advantages of buying things on a credit card rather than a debit card is that if you need a refund because something is not as described or faulty, or the retailer goes bust, the credit card provider, not just the retailer, is responsible for making sure you’re not out of pocket.
This is because of section 75 of the Consumer Credit Act, 1974 – which people often refer to just as “section 75”. This states that when you pay for an item that’s worth between £100 and £30,000 on a credit card, the card provider is jointly liable with the retailer if you don’t get what you paid for. This is the case even if you just paid a deposit on the card that was less than £100, as long as the item cost over £100.
The purpose of this legislation is to protect people from going into debt for things they didn’t receive, or were not as described.
When might I need to use section 75?
If the retailer has gone bust, leaving you without goods already paid for.
If you receive an item that is not as described and the retailer rejects your refund request.
If you receive an item that is faulty or not fit for purpose and the retailer rejects your refund request.
How do I get a credit card refund?
The best course of action for your transaction dispute process will depend on whether or not the merchant is still trading.
If the retailer is no longer trading:
Go straight to the credit card provider – either call them and say you would like to make a claim under section 75 (they will usually send you a form to fill in) or log in to your internet banking locate the transaction in your account history and look for an option to “query this transaction” or similar.
If the retailer has entered administration after you have paid for goods but before their arrival, you can still make a claim, based on an anticipated failure of the company to deliver.
If you are making a claim because of a fault, the credit card company might ask you to arrange an independent report to verify the fault. If the fault is confirmed, it should refund you the cost of this as well.
If the retailer is still trading:
You don’t need to go to the card provider straight away if the retailer is still trading – first, request a refund from the retailer in the usual way but stating that you are making a claim “under section 75 of the Consumer Credit Act”.
It’s only if this is declined or the retailer doesn’t respond that you should contact the credit card provider.
If you have no luck going directly to the retailer, write to the credit card provider giving as many details as possible about the purchase: what you bought, when you bought it, from which retailer. Give receipts if possible and details of what went wrong, such as your goods didn’t arrive or were not as described. Also state that you have contacted the retailer and give details of its reply.
If this refund claim is rejected by the credit card provider and you think the decision is unfair, you could make a claim with the Financial Ombudsman Service.
It’s important to note that time restrictions can apply to certain types of claim – in other words you may have a limited window in which it is possible to initiate the refund process (often 120 days). Although your card issuer may not be legally obliged to offer a refund after this point, depending on its policies, it may still consider your claim.
Can I get a credit card refund in cash or transferred to my account?
Yes, you should generally be able to get any refunded credit is transferred to your current account by BACS payment, or sent to you via cheque. You’ll need to contact your credit card provider directly to request the credit is transferred.
You’re also free to use the refunded credit amount on day-to-day spending or purchases, as you would with your normal credit limit. However, there are a few drawbacks to doing so.
Any excess credit on your card will not be covered by Section 75, which means you won’t be protected if you have your card stolen or need to request another credit card refund in future. If you choose to withdraw the refunded amount at an ATM, you’re also likely to be charged a fee.
What is (and isn’t) covered by section 75
Covered:
Items priced at more than £100, even if you paid for only some of it on credit card. So if you paid £30 on a credit card but the item was for sale at £150, you are entitled to a refund of the full amount.
Purchases in the last 6 years.
Purchases made abroad or goods from abroad.
Not covered:
Debit cards, charge cards, company credit cards and store cards.
Items that cost less than £100 or more than £30,000.
Purchases made via a third party, such as Groupon, PayPal or Amazon. The relationship has to be direct between the card holder and the retailer.
Multiple items. The purchase has to be of a single item. So if you buy 5 festival tickets in one go and the event is cancelled because the organiser goes bust, you may only be entitled to a refund for 1.
If the purchase was made by an additional cardholder (such as your husband or wife) on your card, but was for someone else’s benefit, ie. a gift for a friend.
Credit card refund case studies
You bought flight tickets and the airline goes bust. You should be entitled to a refund from the credit card provider for the flights.
You buy a car for £8,000 and put the £350 deposit on your credit card. You are covered for the whole amount.
You buy a kitchen on credit but the doors are wobbly. You make a claim to the retailer but it refuses your request, saying the wobbly doors have been caused by your misuse. You make a claim to the credit card provider, which asks you to arrange an independent report. The report states that the wobbly doors are a manufacturers fault and the credit card provider agrees to issue you a refund.
Frequently asked questions
With debit cards, providers can arrange something called a “chargeback”, where they reverse the payment made to the retailer. This isn’t a legal requirement, but is common practice for big card processors such as Visa and Mastercard. However there’s usually a time limit of four months for chargeback requests, so they are a bit less reliable than section 75 requests.
The credit card provider will make its own decision about whether the item is not as described or faulty based on all of the available information, so it may disagree with the retailer and support your judgment. Either you or the provider can suggest an independent report to verify the fault.
You could still benefit from the chargeback process, explained above, if you bought an item costing less than £100 on a credit card.
There’s no set time limit on how long a credit card provider has to make the refund.
If you think the decision is unfair and have evidence to support your case, you may take it to the Financial Ombudsman Service.
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To make sure you get accurate and helpful information, this guide has been edited by Liz Edwards as part of our fact-checking process.
Chris Lilly is Head of publishing at finder.com. He's a specialist in personal finance, from day-to-day banking to investing to borrowing, and is passionate about helping UK consumers make informed decisions about their money. In his spare time Chris likes forcing his kids to exercise more. See full bio
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