Eli5: what happens if I buy something on a credit card, pay the balance to zero from a checking account, but then return the item and get refunded? Where does the money go?

Question

Eli5: what happens if I buy something on a credit card, pay the balance to zero from a checking account, but then return the item and get refunded? Where does the money go?

In: Economics

Answer 1

The refund goes back to the credit card account and you would have a negative balance on that account. Typically that balance would just sit on the account until you place more charges on the card to cancel it out, but if the account sits in the negative for too long or you call the credit card company and request it, they will mail you a check for the balance amount.