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A store accepts payment by payment cards, including debit and credit cards. Refunds are allowed, however due to a technical problem refunds cannot be made to debit cards.

Sometimes a refund is necessary if a mistake was made, for example if the clerk scans the same item multiple times or the scanning gun malfunctions. This happened and the customer paid by debit and didn't have a credit card. (The mistake was caught after the customer read the receipt). Also the store does not carry cash. The store can give him the products that he paid for, but may the customer insist on getting a refund? Could the store give the customer credit, or must they actually return the money?

David Siegel
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casablancaeggplant
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    Is the error temporary? Is it something the store has control over? – Comic Sans Seraphim May 25 '21 at 11:09
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    @Studoku management knows but doesn't get it fixed, so in that sense no it's not temporary. – casablancaeggplant May 25 '21 at 11:19
  • Outsider question: Is it usual for a store NOT to carry any cash? That pretty much assumes that no one buys anything with cash. Hard to imagine, at least for me... – gmauch May 25 '21 at 21:03
  • @gmauch In Canada, it would be very unusual for a store not to carry cash. – ikegami May 25 '21 at 22:16
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    Can't refund to the debit card and don't have cash? Bank transfer. Paypal. Mobile payments. There are tons of alternatives, you only need to agree on one. – jcaron May 26 '21 at 00:38
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    @gmauch In some parts of the world, stores that don't accept cash as a form of payment are not exceptional. A store that doesn't take cash payments wouldn't be carrying cash either. – gerrit May 26 '21 at 08:13
  • @gmauch, in locales where paying with a debit card or such is common anyway, and the necessary network connections reliable enough, it's totally doable. I know there are small grocery stores in Finland that don't take cash. I have one nearby, and I don't think it's the only one. There's probably not that many of them in total, but then I expect the covid situation has driven people to avoiding cash even more, so I wouldn't be surprised if it becomes more common. – ilkkachu May 26 '21 at 13:42
  • The question title is inconsistent with the content of the question. The problem isn't that they can't refund to the payment card, it's that they are unable to provide any form or refund. – thelem May 26 '21 at 16:41
  • @thelem that's not right, they CAN refund to credit card – casablancaeggplant May 26 '21 at 20:41
  • @jcaron so then your answer is yes it is legal - since they can refund to credit card. But what if the customer doesn't have a credit card? – casablancaeggplant May 26 '21 at 20:42
  • @casablancaeggplant No, what I'm saying is that there are many alternatives, and if for whatever reason they cannot either refund to the debit card or use cash, then, as long as you agree, there are many other methods. They can't just say "we can't return the money and that's it". Though, by far, refunding to the debit card or using cash would be the two easiest ones. – jcaron May 27 '21 at 11:08
  • @jcaron my point is what if they can't agree: the customer paid by debit and does not have a credit card. I guess they would have to be inconvenienced by withdrawing cash from the business bank account and giving it to the customer (likely on another day). – casablancaeggplant May 27 '21 at 12:16
  • @casablancaeggplant The question title says debit card, not credit card. Debit card transactions are irrevocable. Credit card transactions are not. The basic difference is that with a debit card, you paid using your own money, but with a credit card the credit card company paid the retailer, not you. You get to pay the credit card company later. In some countries, banks which issue debit cards voluntarily agree to provide the same level of consumer protection as with credit cards, but they are not legally required to do so. I don't know what the situation is in Canada. – alephzero May 27 '21 at 22:11
  • ... the concept of "refunding to a debit card" doesn't even exist. If you wanted the store to refund the money direct to your bank account, you would have to provide the store with your bank account details. With a credit card, the store only needs one set of account details for the card issuing company, for every card that has been issued. – alephzero May 27 '21 at 22:15
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    @alephzero Crazy talk. I've had zero problems getting refunds on my debit card from various stores without even having to show who I am, at least when I've used the same card to pay with. – pipe May 28 '21 at 09:48
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    @alephzero in many (most?) countries "debit cards" are just credit cards with 0 overdraft limit. – Dan M. May 28 '21 at 14:22
  • @casablancaeggplant Then the manager had better get it fixed in a reasonable time or I will sue them. If they have an obligation to refund why do you think they can get out of it by deliberately breaking the refund system? However, it's reasonable that refund systems (like all other systems) sometimes break and it might take a few days to fix. It's not reasonable that they never get fixed. And if no refund needs to be given then it doesn't matter. – user253751 Sep 13 '23 at 17:12

3 Answers3

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Could the store give the customer credit or must they actual return the money?

The store has the legal obligation to return the money if the customer demands to be reimbursed. Section 155(4)(a) of the BC Business Practices and Consumer Protection Act explicitly provides reimbursement "to a consumer or class of consumers".

The store's unilateral, inflexible decision to give the customer credit in lieu of a reimbursement is in violation of sections 8(3)(a) and 9(1) of the Act. That approach constitutes undue pressure to enter into an additional consumer transaction, more so where management is aware of the issue and refuses to fix it.

Iñaki Viggers
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  • Just to be extra clear, this answer still holds even when customers can be refunded to credit cards? – casablancaeggplant May 26 '21 at 20:53
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    @casablancaeggplant I'm no lawyer etc but I'd say yes obviously. It would be completely senseless, much beyond the point of "laws sometimes don't make sense". – o0'. May 26 '21 at 22:07
  • However, does it specify that the refund must be returned the way the money was initially paid? If a shop cannot reimburse a credit card, but can give cash, is that in violation? – Flater May 26 '21 at 22:41
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    @Flater "If a shop cannot reimburse a credit card, but can give cash, is that in violation?" No. What matters is that the reimbursement must enable the customer to spend that money elsewhere (or not spend it at all). – Iñaki Viggers May 26 '21 at 22:53
  • @casablancaeggplant "this answer still holds even when customers can be refunded to credit cards?" Yes. The statutory protection against undue pressure is independent of customers' method of payment. – Iñaki Viggers May 26 '21 at 22:56
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Based on how the debit clearinghouses work, it's fantastically unlikely that the retailer is unable to reverse/refund a transaction. That is how the banks want you to do it!!!!

The reason is simple: Suppose you charge $123.45 to my card, we have a dispute. Two things happen in parallel: a) you decide I am right and refund my $123.45, and b) I do a "chargeback" on my debit card.

  • *As long as you have reversed/refund the same transaction, the credit card company will go "OK, these are just the same thing" and they will drop investigation of the chargeback since you already agreed to the refund.
  • However, if you do a standalone reverse charge, then I get $123.45 back, and then the chargeback is investigated, and then another $123.45 is refunded! Now we have another big mess.

Occam's Razor says that either the individual clerk does not have the skills (or authority, though that seems like a blunder in a retail setting) to do the refund on their point-of-sale system...

... Or... the clerk does not want to give your refund, and is hoping to scam you with lies.

In this case, there's a simple (but perilous) answer: the vendor can do a cash refund. That is what they need to do if they can't work the machine properly. Cash is "Legal tender for all debts, public and private". The problem, then, is if a chargeback also occurs, again double refund.

Harper - Reinstate Monica
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    Re "The problem, then, is if a chargeback also occurs, again double refund.", But that's the retailer's problem, not the consumer's. If they're using a system not capable of issuing refunds, that's on them. – ikegami May 25 '21 at 22:14
  • @ruakh A retailer typically selects one clearinghouse and PoS system that handles both credit and debit. So I tend to speak of them interchangeably. My bad: Edited. – Harper - Reinstate Monica May 25 '21 at 22:17
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    It's possible, even probable, the clerk doesn't have the ability to reverse the charge and/or issue a credit on the card. In many POS systems and/or card processing terminals, reversing a charge and/or issuing a credit are features which can be disabled, hidden, password protected, and/or restricted to certain job roles. Reversals and/or credits may only be available to a manager and/or owner of the business. Depending on the card processor (i.e. the company the business has an agreement with to process cards), those functions may be locked-out from access by anyone at the retail business. – Makyen May 26 '21 at 01:51
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    @Makyen Good point, added... but it would be a serious blunder in retail for nobody present in the store to be able to issue a refund. – Harper - Reinstate Monica May 26 '21 at 06:07
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    @Harper-ReinstateMonica this was in bigger retail stores, but every single time I've done a refund it was the shift supervisor who had to be called to process it. Clerks didn't have the authority to do so. Which, actually, gives us another possible motive: the clerk makes a lot of mistakes and doesn't want the supervisor to know. – jaskij May 26 '21 at 10:25
  • @harper "A retailer typically selects one clearinghouse and PoS system that handles both credit and debit." Yes.. but (agreeing with you) even in cases where they have multiple systems they only use ONE for a given transaction and it's refund. – HenryM May 27 '21 at 14:20
  • Good answer except, as others have noted or authority, though that seems like a blunder in a retail setting - many big chains really don't give the ordinary cashiers that power. But those same places always have a supervisor on duty with that power. I have also found stores that prefer to just do cash for the refund if it is a partial refund (as opposed to "customer gets upset and wants to just hand back the whole basket of groceries"). And I just have to say: A few weeks ago I was in Trader Joe's and had a total transaction of exactly $ 123.45, which was really, really cool. – manassehkatz-Moving 2 Codidact May 27 '21 at 22:33
  • @JanDorniak That seems like a very likely answer. Over the years I've more than once had someone try to cover up their errors by saying the proper fix was impossible. – Loren Pechtel May 28 '21 at 03:05
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    @JanDorniak Right. What's not cool is when it's a small shop (e.g. convenience store) and all the staff present "conveniently" are unauthorized to give refunds. – Harper - Reinstate Monica May 28 '21 at 04:06
  • I once mistakenly used my wife's card to make a contactless payment, realised my mistake, and asked to cancel the payment. They claimed they couldn't do that without me entering the PIN number, which I didn't know. – Michael Kay Jul 18 '22 at 22:31
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Yes. They owe you a debt, they can’t just shrug their shoulders and say no can do, but neither are they obligated to repay it in a specific manner.

But they also can’t just hand over a company cash card or a plushy and say the debt is paid in full. You have to agree to accept it. Which would mainly be either cash or putting the money back (given the way the banking system works, I don’t think you could legally refuse to accept a reversal of a debit charge).

Since this is Canada, you might be able to get away with refusing cash in some circumstances, although I would think it unlikely — it isn’t mandatory to accept cash for all debts, but by the time it gets to court, I don’t see what else you could reasonably be asking for. On the other hand, the option to refuse cash and take it to small claims court could give you some leverage. If you won, you’d end up with cash, but they would have had to pay to file a defense at the very least and possibly pay your fees as well, plus any related expenses (their lawyer or representative’s time).

jmoreno
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