What Happens If I Return Something I Bought With a Gift Card?
Confused about returning items purchased with gift cards? Uncover the nuances of refund policies, procedures, and common exceptions.
Returning an item after purchase is common, but when that purchase was made using a gift card, the refund process can raise questions. This article clarifies how these returns work, covering policies, preparations, procedures, and common scenarios.
Understanding Gift Card Return Policies
When an item purchased with a gift card is returned, the refund is almost always issued back to a new gift card, store credit, or, if reloadable, the original gift card. Cash refunds are generally not provided for purchases made with gift cards. Retailers implement this policy for several reasons, including fraud prevention, anti-money laundering (AML) regulations, and maintaining accounting integrity.
From an accounting perspective, gift card sales are initially recorded as a liability. Revenue is recognized only when the gift card is redeemed. Issuing cash for a return would complicate this accounting, potentially converting deferred revenue into an outflow of cash without a corresponding sale. Issuing store credit or a new gift card ensures funds remain within the retailer’s ecosystem.
Policies limiting refunds to store credit or gift cards help mitigate fraud and comply with financial regulations. The Financial Crimes Enforcement Network (FinCEN) requires retailers to implement anti-money laundering programs for prepaid access products like gift cards. Allowing cash refunds for gift card purchases could facilitate money laundering by converting untraceable gift card funds into cash. By refunding to a gift card, retailers keep the value tied to their store, reducing misuse risk and maintaining compliance.
Key Information Needed for a Return
Preparing for a return involving a gift card requires gathering specific items for a smooth process. The item must be in its original condition, often with all tags, packaging, and accessories intact, as per the retailer’s return guidelines. Products must be unused and resalable.
The original purchase receipt or other proof of purchase, such as a digital receipt, is necessary. This documentation verifies transaction details, including purchase date, price, and payment method. Without a receipt, some retailers may still process a return but might offer a refund at the item’s current selling price, typically as store credit, and may require identification.
The original gift card used for the purchase should also be presented, even if its balance is zero. The card’s information, such as its unique identification number, may be required by the store’s system to process the refund. This allows the system to credit funds back to the original gift card if reloadable, or to issue a new gift card or store credit linked to that transaction.
The Return Process
Upon arriving at the retail location, the consumer proceeds to the customer service desk or designated return area. For online purchases, the process may involve initiating a return through the retailer’s website before mailing the item back. The associate will request the item, original purchase receipt, and gift card.
The associate will verify the item’s condition and confirm purchase details against the receipt, ensuring it meets return policy criteria. Once verification is complete, the associate will process the refund.
The refund amount will then be loaded onto a new gift card, applied as store credit, or, if the original card is reloadable, credited back to the original gift card. For online returns, the refund is often issued as an e-gift card sent to the email address associated with the original purchase. The consumer will receive confirmation of the refund, often as a printed receipt or email notification.
Common Scenarios and Exceptions
If only a portion of a purchase made with a gift card is returned, the refund for those items will typically be credited back to a gift card or store credit.
If the original gift card is lost or unavailable, the refund process becomes more complex. Many retailers may still issue store credit, but this often requires additional verification, such as matching transaction details to purchase history or requiring identification. A new gift card or store credit is the common alternative.
When a purchase used a mixed payment method, such as a gift card and a credit card, the refund generally prioritizes the gift card portion first. For example, if an item costing $100 was paid with a $50 gift card and a $50 credit card, the $50 will first be refunded to a gift card, and any remaining balance will then be credited back to the original credit card.
Online returns for items bought with a gift card typically result in an e-gift card refund, sent electronically to the purchaser’s email. If the returned item was a gift, and the recipient is making the return, the refund is usually issued as a store gift card or store credit, provided a gift receipt or other proof of purchase is available.