Returning a gift? Consider the effect on rewards points

Even if your intentions are good, you will lose rewards if your account is credited


To prevent users from gaming the system, credit card issuers usually dock your rewards points when you return an item, even if it was a gift.

The content on this page is accurate as of the posting date; however, some of our partner offers may have expired. Please review our list of best credit cards, or use our CardMatch™ tool to find cards matched to your needs.

Dear Cashing In,

I received a gift and returned the item to the store without the receipt. The clerk returned the amount of the purchase to my credit card (a card that was not used to make the original purchase). Now, I have lost reward points based on the amount of my return. Is this right? In my opinion, I shouldn’t lose points. In effect, I’m just paying off my account with the return. Thanks. – Jim

Dear Jim,

There are a lot of people who are going to be returning presents after the holidays. A recent poll showed that 77% of consumers expected to return at least one gift they received this holiday season. And more than 20% of those surveyed estimated they would return half their gifts.

Let’s break down exactly how purchases and returns work – and what their effects are on reward points. A lot is going to depend on the return policies of the individual store. In many cases, stores devise return policies that combat fraud – but sometimes those rules wind up ensnaring honest folks.

Check out all the answers from our credit card experts.

Ask Tony a question.

See related: Using gift cards to amass rewards points

Someone has to pay

Let’s say your mom buys you a $200 jacket at a sporting goods store. When that charge posts to her credit card account, she will receive whatever rewards are associated with that account for a $200 purchase at a sporting goods store. That might be frequent flyer miles or cash back – it depends on the card.

She gives you the jacket as a present but maybe it doesn’t fit, or you consider it ugly or you already have a jacket you like – so you go to return it. Stores have different return policies, but in many cases, you must show a receipt to receive cash in hand for the return. However, it is possible you could receive credit on your credit card – it all depends on the store and its policy.

If the store gives you a credit on your credit card – and it is a rewards card – you will lose rewards. That’s because rewards are calculated each month based on your net purchases, which means that if you have a credit applied to your card, you are spending less in net purchases.

For instance, if you charged $1,000 on your card during the month, but you have a credit of $200 for the returned jacket, your net purchases are only $800 – so you receive whatever rewards are associated with spending $800, not $1,000.

If an item is returned for a credit, the store has to credit somebody’s credit card account. If you could gain reward points just by buying items on your card, then people would buy items, rack up points, then return their purchases to the store without fear of losing points.

The store might also have a policy that returns can go only on the original credit card. If that’s the case, they would refund the $200 to your mom’s credit card. (And you would be out a gift – you’d probably have to talk to her about that.)

Check the store’s return policy beforehand

A more likely scenario is that the store offers you a store credit of $200 (or a store gift card worth $200) when you bring back the jacket. If the store does that, then the original purchase would remain on your mom’s card (along with the rewards she earned), and you could pick out something more to your liking.

There would be no effect on your rewards since there would be no credit card transaction that has any points or miles consequences – it would just be an exchange of merchandise.

The best advice is to understand the store’s return policy before you take something back. Good luck!

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

Credit Card Rate Report
Cash Back

Questions or comments?

Contact us

Editorial corrections policies

Learn more