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To my understanding most stores have policy that a refund must be done to the same card that was made to use the purchase. However this is not always the policy and I don't think there's a legal or technical requirement for it.

I noticed that when I get a refund it undoes the credit card points or cash back that I had gotten with the purchase. Hypothetically if I use a different credit card for a refund, would the card that I made a purchase on still allow me to keep the points or cash back because they "didn't know" about the refund?

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  • That sort of situation is likely one reason why refunds to the same card are, at least, strongly encouraged by the credit card companies, even if there's not a legal requirement. You might also check out the Ts&Cs: if they say you lose points/bonuses should a purchase be reversed, you are veering into fraud territory should you manage to refund it to other than the original card and don't tell them.
    – TripeHound
    Commented Jul 8, 2021 at 13:04
  • @TripeHound out of curiosity, who would be the victim of the fraud?
    – user110101
    Commented Jul 10, 2021 at 8:29
  • Potentially the credit card company because you've obtained something from them (points/cash-back) for purchase that wasn't made (or was "un-made"). Of course, it could depend on the precise Ts&Cs.. if they talk about reversing bonuses if "a transaction is reversed" then getting a refund by another means (different CC, cash) might not technically be a problem. If the Ts&Cs are more "cancelled purchase" then not telling them that the purchase was cancelled could be a problem.
    – TripeHound
    Commented Jul 10, 2021 at 8:59
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    @TripeHound now that I'm curious, I red my CCs Card Member Agreement and it doesn't seem to prohibit this. It does, however say that an item purchased with it cannot be refunded by cash. I wonder if this is legal...
    – user110101
    Commented Jul 22, 2021 at 1:13
  • If you want to make extra points, there are much better ways. For example, my grocery store has a pharmacy in it, so my medicine purchases are considered grocery.
    – Aaron D. Marasco
    Commented Jul 22, 2021 at 12:46

3 Answers 3

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The reason why the store & credit card companies want to credit the refund to the same card is:

  • To stop people from getting around the points rules.
  • To stop fraud where you weren't the person who bought the item, and now are turning it into cash. It could have been stolen.
  • Also reversing a transaction is easier the creating a transaction that sends money from the store to a random card.

I have never known a store that allowed you to use another card for the refund. If you no longer have the card, or it was a gift, they generally allow you to convert it into store credit.

But if they did allow this...the first card would never know, and you could keep the points. Unless of course the points program was being run by the store.

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There is a financial incentive for merchants to refund to the same credit card, which is why most stores require it. Those that don't require it are willing to take a financial hit to do their customers a favor.

Your CC bank charges merchants a fee every time you use your credit card. If you return something and the merchant reverses that charge, they get (most of) the transaction fee back from the bank, and consequently the bank reverses your points too. If the merchant refunds you any other way besides reversing the CC transaction, then the merchant eats that fee and you keep your points. This includes refunds to another CC, or cash refunds, or store credit.

Note if you did this purposefully, you are technically "stealing" from the store, not your bank.

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  • The merchant probably has to pay a fee to put the credit on the second card as well.
    – chepner
    Commented Jul 9, 2021 at 14:12
  • @chepner that's a good point (or question). I don't know if they pay a fee for returning to another card. A quick search didn't turn up any evidence that they do, but I assume it would be processor dependent.
    – TTT
    Commented Jul 9, 2021 at 15:01
  • Why would a merchant bother to enforce a policy that benefits the credit card companies but no them? Are most merchants contractually obligated with the credit card companies to refund to the same credit card? I'm not saying anything about ethics, just curious.
    – user110101
    Commented Jul 10, 2021 at 8:27
  • @user110101 It's the other way around (unless I misunderstood your question?). The merchants only benefit when they refund to the same card by reversing the transaction, because that's the only way they can recapture some of their fee. This is why most merchants don't allow returning to a different card. Those that do allow returning to a different card, are just being nice to the customer.
    – TTT
    Commented Jul 10, 2021 at 16:44
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    @user110101 I don't know if there is an additional fee for processing refunds as chepner mentioned. When I had a merchant account (in the US) I never had to pay a return fee, but that may be processor dependent. But the basics of it is, suppose someone buys something form the store for $100 and pays via credit card, the store has to pay approximately 2.5% in credit card fees=$2.50. If the item is returned and the store reverses the $100 transaction on that CC, perhaps $2.40 of the original fee is refunded to the merchant. But if the store refunds to a different CC, the full $2.50 fee is lost.
    – TTT
    Commented Jul 11, 2021 at 16:46
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I am not a/your lawyer; this is not legal advice.

I believe the intent, at least, of the Amex Card Member Agreement you mentioned in a comment would not permit refunding a returned purchase to a different credit-card (or for cash). Further, were you to manage to do this, they would be within their rights to cancel any cash back you may have been credited with.

First, we have the following clause from the above agreement:

Permitted Uses

If permitted by the merchant, you may return to the merchant goods or services obtained using your account and receive a credit to your account.

As an essentially disinterested third-party, I read this as meaning that receiving a credit to your account (the one used for the original purchase) is a necessary part ("and receive") of the returns process.

A little further on, obtaining a cash refund is explicitly prohibited:

Prohibited Uses

  • return goods or services obtained using your account for a cash refund,

The reason behind this clause is probably more to prevent avoidance of the fees or higher interest rates of a cash advance, but the effect is the same: you cannot get cash for a returned purchase.

(Incidentally, were I an Amex lawyer, I would probably try and argue that a refund to a debit card would effectively count as a "cash refund". However, because debit cards are not explicitly mentioned, that argument may not work).

Next, we have:

Prohibited Uses

  • obtain a credit to your account except by way of a refund for goods or services previously purchased on your account,

This clause explicitly prevents an Amex card from being the "other card" in the scenario you are asking about. In other words, if you bought something on a different credit-card (and got points from that card's cash-back scheme), you would not be permitted to return the item and have the amount credited to your Amex card.

In summary, my reading is that refunds of purchases to your Amex card should be made to the original card (where they will cancel/reduce cash-back rewards). Refunds in cash or from purchases made on other cards are explicitly prohibited.

Whether attempting (or succeeding) in getting a refund "that they don't know about" (so as to not lose the cash-back) counts as fraud, or "just" a breach of their terms and conditions I don't know. However, the above agreement contains, in relation to the cash-back program:

We may disqualify you from participating, or terminate your participation in the cash back program at our sole option and discretion at any time with or without cause and without giving you notice

So if they ever find out (or even suspect) that you have "abused the system", they could cancel your participation.

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