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 balance is returned to the credit card, which becomes a negative balance on the account (a credit balance).

In my experience, many credit cards will, unless instructed otherwise, hold onto such a balance until further transaction activity uses it up, or if the account is dormant, eventually mail out a check for it