If you return a purchase, can you keep the credit card rewards?

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Dear Cashing In, 

If I return something that I bought with a credit card and get my money back, will I lose the points that I got with that purchase? —Mike

Dear Mike,

The short answer, unfortunately, is yes. When you return an item to a store—whether the purchase was made online or in person—the number of points you earned from that expense will be deducted from your rewards balance on your next credit card statement. It doesn’t matter which rewards credit card you’ve chosen to use for your purchase, you can’t have your return and keep your rewards, too.

Let’s say that you bought your mother a new $40 pair of slippers from Macy’s for Christmas. Your mother gets warm feet and you get 60 cash back rewards points since you made the purchase with your Chase Freedom Unlimited® that earns 1.5x on all purchases. Unexpectedly, however, your generous gift flopped, and now you’re left returning the slippers to get a $40 credit back to your card. On your next statement, you’ll not only see the money returned as a credit, but you’ll also see the 60 points deducted from your running award balance.

The reasoning behind this is simple: if credit card companies didn’t take back the points you earned, we’d all be buying things every day and returning them as a way to earn a free trip to Tahiti!

What happens if a charge is refunded to my credit card and I already used the rewards?

It doesn’t matter if you’ve already used the rewards points that you accrued—you’ll still see that deducted. The card issuer is not actually removing the points from the mileage program in which you’ve accrued them, they are debiting them against your current earnings—the same way that a credit of a dollar amount is made against your current credit card spending for a return.

Is there ever a situation when I can keep the points?

Because nearly all stores require you to use the same credit card or some form of payment for your return that you used for your initial purchase, there aren’t many scenarios where you get to keep the points when you make a return—unless you aren’t actually getting the funds credited back to your account.

The primary scenario in which you’d be able to make a return and keep the points that you’ve already earned is accepting a store credit for your purchase instead of having the funds returned to your credit card account. Return those slippers for a $40 gift card and you’ll keep all your points.

Another scenario where you’d keep the points on a return is if your return turns out to be an even exchange (returning mom’s gift for a different size pair of slippers). If however, you decide to upgrade mom’s slippers in exchange for a nicer pair—say ones that cost $59, you’d also get an upgrade in points to account for the $19 price difference.

What about credit card return protection?

If you’ve chosen a credit card with credit card return protection, it’s safe to say that all the same rules apply. Return protection simply guarantees that you’ll be able to return your product even if the store won’t take it back by returning it directly to the credit card company in exchange for a refund. As soon as the refund posts to your card statement, the points which you earned from that same purchase will be deducted from your statement’s current balance.

Are the rules different for returns with online retailers vs. brick-and-mortar?

It doesn’t really matter if you’ve purchased your item on a shop’s webpage or in their store. If the transaction triggers a return of funds to your credit card, the respective rewards will be simultaneously deducted. 

Savvy buyers should also beware, if you’ve purchased the item online through a rewards shopping portal to stack a deal, you will also lose the bonus points that were given to you as part of your double dip. Most often, bonus points awarded through online shopping are not credited to your account until 6-8 weeks after purchase. If you make a return, your bonus points will be taken away before you ever receive them. The purchase will also no longer count towards cumulative earning if you’re spending towards a bigger rewards point shopping bonus.

How returns effect earning bonuses

Any credit card purchases you return will count against any cumulative earning you’ve done towards receiving a future spending bonus—like meeting the minimum spend on a new credit card to receive a big signup bonus. How terrible would it be to reach the goal of spending $3,000 in three months, and then not receive your big signup bonus because your slipper return left you $40 short? That’s even worse than having to give back the 60 points your purchase earned.

Bottom line

Returns happen. Mom might not like the slippers, those new jeans might not fit as well once you’ve gotten them home or you might just simply wake up with a case of buyer’s remorse. While it’s never fun to lose points that you’ve worked and shopped hard to earn, the bright side is that every new trip to the store brings another opportunity to earn them back.

Have a credit card question for Stephanie? Drop her a line at the Ask Bankrate Experts page. 

Written by
Stephanie Zito
Travel Rewards Expert Contributor
Stephanie Zito is a professional traveler, self-employed humanitarian consultant and collector of credit card points. She shares savvy travel tips that she’s learned firsthand circling the globe for more than 25 years. She’s a backpacker, expect and premium traveler who’s visited more than 130 countries and all seven continents. Her life motto is “See the world, change the world, have fun doing it!”, and her mission is to inspire others along the journey.