Tips for Tricky Buy Now, Pay Later Holiday Returns

A hand is holding a cellphone, screen shows "Buy now, pay later".

Shoppers who used Buy Now, Pay Later (BNPL) loans to help finance their holiday shopping may soon find that returns can be more challenging than buying directly from a retailer with cash or a credit card. You’ll see BNPL payment plans when you shop online, in stores, and some providers offer shopping apps. BNPL is a type of installment loan. It divides your purchase into smaller, often interest-free installments, with the first due at checkout. The remaining payments are billed to your debit or credit card until your purchase is paid in full. Some providers voluntarily offer formal protection policies to reassure shoppers, which may increase the likelihood of a refund. However, returns can also be trickier with BNPL purchases since they may not come with the dispute provisions that apply to credit cards. For example, if a package goes missing or arrives damaged, consumers have fewer protections.

What to know about BNPL returns: When you use BNPL, you’re choosing to divide your total purchase into smaller, often interest-free installments while the provider pays in full on your behalf. That means when you make a return, the returned item goes back to the retailer, but the refund goes to the BNPL provider. It’s up to the provider to apply the refund to your account, and there’s usually a lag. Because BNPL loans have quick turnarounds — standard pay-in-four loan payments are due every two weeks — you could get stuck making payments on an item that has already been returned.

Making a seamless return with BNPL isn’t impossible if you know the process ahead of time. Maximize your chances of making a successful BNPL return by following these helpful tips:

Check the BNPL provider’s return process: Most providers maintain a webpage that explains their return process, which varies by provider. In some cases, to avoid late charges or penalties, you may need to keep making payments until the return is logged with your BNPL provider. Some providers may allow you to defer a payment once you’ve made a return. Other providers may ask you to report a return on their website or app, while others require no action on your end. Learn what to expect with a refund and timeline.

Return the gift to the store: Returns are ultimately subject to the store’s policy, so check the store’s return policy. Shoppers should prioritize getting returns approved with the store before contacting the BNPL provider. If possible, return online orders in person so you don’t risk the item getting lost in the mail. Bring relevant documents like a receipt or email confirmation. If you don’t have a receipt, you may be able to make an exchange or receive store credit, depending on the store’s policy.

Keep records: Retain copies of all transactions, including returns, exchanges, or issued store credit. If you mailed a return, get a tracking number. Keep a log of communications with the store.

File a dispute: If your purchase has not been refunded in a timely manner (a few days or weeks depending on the provider), contact the provider’s customer service department for more information. If the store isn’t accepting your return, consider filing a dispute with the provider. This may mean logging in to your BNPL account and filling out an online form.

If your refund isn’t resolved, you can File a Complaint with the DFPI online or by mail. For questions or help filing a complaint, contact us at (866) 275-2677 or

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Last updated: Feb 14, 2023 @ 10:13 pm