Can You Buy with a Credit Card & Return for Cash?
No, it’s not possible to make a purchase with a credit card and then return what you bought for a cash refund. While that might disappoint you or even seem illogical given that your credit card company paid the merchant when you made your purchase and you can presumably settle up with your card issuer while recouping your expense in cash, there are a few reasons why cash returns for credit card transactions aren’t permitted.
- It’s Complicated: As mentioned above, your credit card company basically pays for the purchases that you make with plastic, reducing your available credit in the process, and you pay it back at a later date. As far as the merchant is concerned, the transaction is completed when the charge is approved at the point of sale.Adding a cash return to the mix at a later date would simply confuse the retailer’s accounting practices because the returned amount would be going to you rather than the credit card company that originally paid the merchant.
- Cash Advances are Risky Business: Issuers don’t want you to use you their credit cards as ATMs, and at the very least they want the ability to charge you accordingly. The reason is that cash advances are less likely to be paid back by consumers than normal purchases, which is why they carry such high fees, interest rates close to 30%, and credit lines that are much lower than your standard spending limit.
- Cash Returns Would Promote Fraud: Allowing cash returns for plastic purchases would be tantamount to offering an open invitation for fraudulent gamesmanship and other misconduct. Fraudsters would easily be able to convert purchases made using stolen credit cards into cash, which is far more valuable and harder to track than material goods.
Finally, there is already an established process for returning credit card purchases. The merchant will basically just swipe your card again and register a negative amount equal to the cost of your original purchase. You will then see two transactions on your credit card statement: one with a positive number for the original purchase amount and one with a negative number for the corresponding refund.
This might even prevent any money from changing hands/accounts, as credit card companies typically pay merchants for orders in batches (i.e. cash isn’t necessarily wired immediately upon a transaction being processed).