BNPL Can Complicate Your Returns. What Experts Want You to Know

Holiday shopping is wrapping up and if you realize you accidentally bought your son the wrong color race car, you might be looking to return or exchange the item. But how do you do this if you used a Buy Now Pay Later plan? In most cases, you’ll be able to initiate a return the same way you would with other payment methods, but you may run into hurdles if you’re returning an item in-store. You also won’t receive your refund right away, because the retailer will refund the BNPL company. It could take several days to over a month for the BNPL provider to then refund your money. When I was researching BNPL returns, I found threads with many Reddit users complaining about BNPL returns. Most found the process to be clunky and tedious. Experts weren’t surprised by this. “The return process will be significantly longer and the refund will be sent to the BNPL company,” said Larry Sprung, a certified financial planner and founder of Mitlin Financial. If you need to return or exchange an item you bought with a BNPL payment plan, here’s how to do it.

Can I return items if I paid with BNPL?

I contacted and researched a few popular BNPL providers to find out if you can return purchases placed on installment loans, and the short answer is yes. However, just like credit cards or cash, a retailer must approve the return and issue a refund before your BNPL provider can process it. For example, Affirm’s site says that a refund depends on the retailer’s return policy, and a return cannot be processed until the store requests a cancellation. If a retailer declines the return, your BNPL provider likely won’t issue a refund. “Like other payment methods, returns and refunds are subject to the merchant’s policies. If a refund is approved by the merchant, Affirm will refund the purchase in full. If the consumer took out an interest-bearing loan, they will only be responsible for interest already paid,” an Affirm spokesperson said. In some cases, a store may offer you store credit or a gift card as a refund. If you haven’t paid off your BNPL loan yet, you’re still responsible for the full payment. Pro tip: If you gift an item to someone outside of your household using BNPL, you may need to go with them to return the item. “Some returns will require the Klarna or Afterpay app, which means you’re the only person who can make the return,” said Jen Smith, a CNET Money expert, author and co-host of the Frugal Friends Podcast.

How do refunds with BNPL plans work?

You can initiate a return for orders made with a BNPL plan through the retailer’s normal return process, in most cases. But it could take you longer to receive a refund. To return an online purchase you made with a BNPL plan, log into the retailer’s website, go to your purchases or order history, select the item you want to return and follow the prompts to return the purchase. The retailer may direct you to the BNPL servicer’s website to follow the instructions for a return — which can also vary. Your refund will first be sent to the BNPL service provider. From there, the BNPL app will refund you for however much you’ve paid them for the item, which can take a few days to a few weeks. To return an item you purchased at a store using BNPL, you’ll need to check to see if the store accepts returns for BNPL purchases. If they do, you can return the item and your refund will either be issued to the BNPL company or to you as store credit or a cash or debit return. If the store doesn’t accept in-person BNPL returns, you can often return the item online or by mail. You may need to visit customer service or call the retailer’s customer support line to learn the correct process. The BNPL process can vary widely by store, said Smith. “For instance, Sephora accepts returns of products purchased with Klarna and Afterpay while Ralph Lauren makes you return them by mail.” If you do have to ship the product back, Smith said you might be on the hook for the shipping fee.

When will I get my money back?

It could take anywhere from a few days or weeks to receive your refund from a BNPL company. For example, Affirm’s website says that your refund could take three to 10 business days to show up. Affirm will either cancel your loan (if you haven’t made any payments), update your loan balance and payment schedule to reflect the refund or send your money to the payment method on file. If you paid any interest on the loan, those charges will not be refunded. You can also check the status of your return with your BNPL provider by phone, app or email. Watch out: If your refund takes time to process and you have an upcoming BNPL payment, it’s important that you continue to make on-time payments until your refund is finalized. Otherwise, you could incur late fees.

What to know before using a BNPL plan again

To avoid the potential hassle of handling a return paid with a BNPL plan, Sprung recommends making sure it’s a purchase you’re going to keep. “It may be best served to use BNPL for purchases that you believe will not need to be returned,” said Sprung. Sprung also advised keeping notes if there’s an issue with the BNPL provider. You may track receipts, purchase and return dates and paid installment payments. “Make sure you have patience. This will not be a quick process and could take thirty-plus business days to be finalized,” said Sprung.