/ Money, Shopping

Why do we have to wait so long to get a refund?

Getting your money back

When I buy goods online I have to give the shop my payment details before they’ll send out the goods. Nothing wrong with that. But if the product turns out to be not what I expected, why doesn’t the supplier return my money with the same urgency?

Back on 6 February, my wife ordered a pair of shoes online from an ad in a catalogue. Unfortunately, the quality of the shoes that arrived bore no resemblance to those portrayed, so she returned them.

How quickly did she get her money back? Straight away? In fact it was 13 March, five weeks later, and even then only after several phone calls and with the costs of delivery and return deducted.

And that wasn’t an isolated example. Also in March, I had a problem with my broadband speed and was advised by my very reputable internet service provider (ISP) that the problem was with my modem.

So I ordered a new one from the ISP, which failed to solve the problem. The ISP admitted the problem was with its own equipment and quickly it sent a prepaid plastic package for me to return the modem. But again it was several calls and four weeks later before my money was returned. To be fair this was the fault of the modem supplier, not the ISP.

It goes on. In April I changed energy supplier – again from a very reputable company. The new arrangement started on 2 May but I’d left a credit balance with the old supplier. Again it took several calls before the cash was refunded – on 10 June about five-and-a-half weeks later.

Refunds must be quicker

I’ve experienced this kind of tardy service several times before and suffered in silence. Now I feel something must change.

I can understand that when you return goods, there must be a short delay while the retailer checks you’ve returned them in good condition – but that should surely take no more than a week.

About 25 years ago, I worked with a charge card company whose policy was to repay its service establishments (hotels, garages etc) in precisely 18 days. It wouldn’t shorten that period since every day it earned £600,000 in interest. No doubt delayed repayment policies also benefit other companies.

Have you had similar problems with getting your money back? How long did you have to wait?

This is a guest post by Phil Clarke, a community member on Which? Conversation. All opinions are Phil’s own, not necessarily those of Which? We chose Phil’s idea from the ‘Your ideas’ section on the website, make sure you share your ideas too.


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Sadly all part of rip of Britain, online businesses love getting order and taking your money up front BUT as soon as there is a problem and you return an item the business concerned then goes into a ‘long delay mode’, and you are made to wait and sweat for the money that you originally paid up front.

I am afraid that, in terms of satisfaction with the product, buying things on-line is not much better than when mail order was the predominant form of distance selling, and thousands of customers would put up with disappointing products rather than try to get their money back. But when they did request a refund it was usually processed quickly because that was one of the competitive marketing points of mail order – a quick and easy ‘no arguments’ refund [unlike with a shop purchase]. Most of the major mail order companies had a reputation at stake and would not be allowed to advertise in newspapers and magazines unless they abided by a strict code of customer service [which still applies today in print media marketing].

With on-line purchasing the picture has changed considerably. Many of the companies are little known or upstarts and do not have much of a reputation to protect, although others are household names but have decided to delay refund payments as a cashflow-based business policy. They are always behind with paying their suppliers so they are using customer receipts as working capital for as long as they can drag it out, and there is no doubt that, in the garment and footwear categories, the market place is exceedingly competitive – prices have been slashed to the bone, and the firms themselves are barely a wage-bill away from extinction.

One of the trading differences that has changed companies’ approach towards customers is the huge volume of returns they are experiencing. While ordering has never been easier, returning items has also become much more straightforward with appropriate labels and facilities included with every package – you just ring up the carrier and they call round and take it away for you [no more queuing up at the post office]. It is alleged that many consumers are abusing the system: buying several sizes and colours of the same item, buying things to wear once and return, or just getting it wrong. So the suppliers are reluctant to make returning goods any easier and might even be trying to put people off. Traders are attributing their refund delays to the volume of returns when the reality is that they are not investing sufficient resource into the returns-handling process and are continuously in a back-log, especially after the release of a new catalogue or seasonal range.

Where the goods do not match the product description, or are broken, or are not fit for purpose, or are unsaleable for any other reason, then they must refund the customer expeditiously and efficiently and really ought to be named and shamed if they don’t. Most purchases are made by credit card and the refund would normally take the form of a reversal of the payment; if that payment has been made just before the issue of the monthly statement then it will be impossible for the reversal to take place within the accounting period and it can easily slip further into the next period. There seems to be a poor connexion between the customer service staff who [once you have got hold of them] promise a refund and the actual execution of that promise.

There are good retailers, both large and small, who deal with refunds efficiently and provide exemplary customer service but we can only discover them by experience and recommendation. Publicising the bad ones would help, but many people who buy on-line or from a mail order catalogue never have any reason to return goods and so are unaware of the quality of the company’s performance in this respect.

Another related gripe over refunds is the practice of many companies not to issue immediate refunds when goods ordered are not available; they hold on to the payments in the hope and expectation that the customer will order again and be credited at that time. That is probably a legitimate consequence of having an account with a company and only paying when billed, but it is creeping into general cash-with-order trading for customers who just wish to buy things from time to time or as a one-off and do not wish to run an account.

I have noticed that buying on-line and mail order purchasing from catalogues are certainly no longer a more economical way of buying clothes or housewares even where the quality might appear to be equivalent to high-street shopping. It seems that many of the prices shown are false – targetting the gullible – since heavy discounting [against the falsely-inflated opening prices] usually occurs quite quickly by means of a plethora of e-mail messages. But even the resulting prices are not necessarily a bargain and often do not represent good value for money when the quality of the product becomes apparent.

Scottish Power. It needed a very sarcastic email to finally get what they owed me after about six months of ringing and getting nowhere

I had fun with Scottish Power too. I had a dual fuel online account and when I left the company they allocated the credit balance into separate gas and electricity accounts. I knew how much to expect in total and when a smaller amount was refunded I discovered that they had only given me credit for one fuel. That was not the only problem I had with the company.

More recently I left e.on, but they were prompt in making a refund. If they had not kept me well in credit I might still be with the company.

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Further to my original topic. I must say that I am very impressed with Amazon’s refund policy. I purchased a couple of accessories which I thought I might need with a hard drive enclosure that I’d bought. When the enclosure arrived I saw that the enclosure was complete so I didn’t need the two extras. I contacted Amazon for a return and they repaid the cost to my bank before I’d put the objects in the post!

And today I complained to Amazon when an item for which I’d paid for express next day delivery arrived three days late. I was not only refunded the postage but also the cost of the product (but that was just a small amount). Still great service.

ya online sites charge the card immediately but have to wait for some time to get a refund. I actually deal with this all the time. even a company refund the money from their systems asap it takes time to refund. most of the online website use a merchant who proved the payment gateway. so this merchant connect the card holders bank and the online website company’s bank. the process is much smoother when you charge but it takes time to get a refund. even the company doesn’t get the money immediately to their account. it takes few days for the merchant to debit the money.

How ironic!
Yesterday I signed up for the Which? Power of Attorney special offer and paid £129. I noticed that the money was taken from my bank when I checked this morning. When I read the guidance notes later I realised that I had made a mistake, I thought I was arranging Probate for my executors so had to phone to cancel.

The cancel worked OK and I was told that my money would be refunded in 7 to 10 days!!

This is the email that I received after complaining about the delay>

Dear Mr Clarke,

Thank you for taking the time to complete our customer service feedback survey, and I am pleased to see that you have rated the service positively.

From your comments; I thought you may like an explanation as to why we advise 7-10 days for the refund to be processed.

When a payment is made to us, it can take a few days for the transaction to be completed. We then have to wait a few days to ensure that they payment reaches our account and is not withheld or with drawn by the customers bank. Once the payment is received it can then be refunded. The refund is in most cases instantaneous and will only take a day or two to be returned to the customer, but this also depends on how fast the customers bank takes to process the payment back into their account, and this time of year it may take slightly longer. We therefore feel that it is best to advise all of our customers that refunds will be processed within 7-10 days although in reality it is much faster.
Once again thank you for taking the time to complete our customer survey.

I trust that this helps you, if you have any further questions, please feel free to contact me, I will be happy to help. I am available Monday-Friday 9am-5pm:
T- 01992 822803
E- which.wills@which.co.uk

Enjoy your weekend.


Victoria Marriott, A.NALP, Q.Inst.Pa
Wills specialist
Which? Wills Team

Hi, thanks for your comments.I’m sorry you are unhappy with our refund procedure and I’m happy to pass the comments back to our Wills team. This Conversation is about a refund which took 5 weeks to appear, we would not expect this to happen with any refunds we process.

Seems a reasonable explanation.

It isn’t reasonable to me! If my money can move speedily through the banking system when I pay someone why can’t it move at the same speed when the money comes back?

Which? said it takes a few days for your payment to reach their account. If this is correct then they cannot issue a refund until they have possession of your money, otherwise fraudulent refunds might be given. If they are right, your money does not reach Which? as speediliy as you might think. However, you could follow this up with Which?

Your money has to ‘clear’ first, Khormaksar. This means the receiving bank has to be sure your payment has not been stopped by your bank for any reason. There is a time allowance for this process after which the funds cannot be reclaimed and are ‘cleared’. Only then can any refund be made.

I thought the letter you received from Which? was exceptionally pleasant and informative in these commercially-disobliging days. I hope you soon got your money back.

this is rubbish just an excuse for not refunding

Christine — It is not an excuse for not refunding because the refund took place in accordance with the normal timescales.

Unless you hand over notes and coins in payment for something there is a time lag while the transaction is processed; this is so that there is certainty that the money has been paid in and not stopped or diverted.

In this particular case, Mr Clarke [khormaksar] made a mistake and wanted his money back. It is only fair for Which? Legal and the banks involved to be sure that Mr Clarke’s payment had reached them in the first place before returning it to him. Unlike with some other organisations, there was no charge to the customer for changing his mind over the service he was seeking.

With internet banking, making a a payment transfer to someone else does not mean that the money actually goes into their account immediately and can be spent. There is still a clearing process. This is for the security of all customers to prevent fraudulent activity. It also explains why refunds must be made to the source from which the initial payment was made.

Malcolm and John, I appreciate your allegiance to Which? I am also a Which? member and I am also committed. The point that I am making here is not just with regard to this sum of money but the general principle. When I sent my money for this purchase it was immediately recorded in my bank so I would imagine that it was similarly recorded with the supplier (Which? in this case) – at most within 24 hours. Why, therefore not a similar reciprocation? I can see no valid reason why a sum of money should be ‘in suspense’ between accounts for 7 to 10 days. My bank, Nationwide, pays a decent interest (5%) on current accounts (first year) so that (admittedly small in this case) interest is lost to me but is obviously of benefit to someone else.

My name is Phil Clarke and I wrote the original article above which started this conversation. You may note from my original article that I once worked for a very large finance company whose deliberate policy was to only repay money owed after 18 days (competitors were repaying within 2-3 days). Each one of those days was worth £600,000 to that company – so the cash is not ‘in suspense’ for 7 to 10 days someone is profiting from that delay. You may note that on 9th July 2016 I wrote, that when making a return to Amazon the cash was refunded to my account even before I had returned the goods! Now that’s what I call service!

Knor… I am not commenting based on any allegiance to Which? in this case. As I understand it, whilst the payment may be shown as leaving your bank account, it may not have cleared into that of Which? That is what Which? seem to say. If that is true, then they gave a reasonable response. If, however, you know what they say to be untrue then I would support a further examination of your delayed repayment.

I agree with Malcolm.

We have moved on a long way since financial transactions had to be moved physically and the banks clearing system (BACS) operated overnight. With todays technology money moves instantly. How else could you present your credit card and come away from a jewellers shop with a diamond necklace?

I have just made a payment online from my bank to my daughters savings bank (different banks) and the money will arrive today!

Quite so, Mr Clarke, interbank transfers are rapid using the Faster Payment Service.

When you pay for something with a credit card it’s not your money that’s transferring, of course, but the bank’s or card issuer’s, but your available balance will be reduced immediately to prevent you spending beyond your limit.

When paying with a debit card there is a two- or three-day delay in the money being deducted from your current account but you have nevertheless been able to take the goods [or eat the meal] you have bought.

Incidentally, cheques and other material payment instruments still move physically.

Yes, Mr Ward, cheques are processed more slowly just like hand-written letters are slower than emails. I think you are missing my point; money moves very quickly from purchaser to supplier but at snail pace from supplier to purchaser. I do realise that the banks are, deliberately, responsible for part of the delay. In 2003, Which? did some research into banks clearing times and reported that “… seven banks and building societies took four days [not 7 to 10 notice!] to make telephone and internet transfers.” At the same time the BBC were also doing some research into banks clearing times and reported that, “Banks in the UK could introduce a system to move money more quickly but say there is insufficient demand to justify the cost.” The Office of Fair Trading, at that time, estimated the banks made £35 million a year in interest from the delays. The BBC also reported that the banks in Sweden had the same delays as British banks until the Swedish government stepped in and forced them to change. The BBC said, “The banks were dragging their feet and that wasn’t terribly surprising as we know the longer it takes, the more money the banks make. Now, in Sweden, it takes just a few hours – payments made in the morning arrive in the afternoon.” Incidentally, that is the way that my, Nationwide, bank works. When I send money to my daughter I don’t use any fancy ‘Faster Payment Service’, I don’t ask for it to be processed fast – it just is!

That’s the banks side of the problem, but if the supplier doesn’t set a payment in motion that is why the 3 days bank delay stretches to 7 days – 10 if a weekend is involved.

Finally, I really don’t understand why you are making excuses for this tardy repayment system. Are you a banker – or a supplier? If you were arguing from a consumer point of view I believe that you may have a different opinion.

I am not in banking or a supplier. I am just a retired citizen who has a current account with the Nationwide BS. I use it a lot for making payments and the section of the website that I use is the Faster Payment Service although it might not be called that on the website. It is a process introduced by the banks a few years ago for using the internet to shortcut the normal clearing timescales. As you say, whatever the payment process, additional delay can be caused if the supplier doesn’t execute the refund for some time. The money banks make in interest from the time taken to clear payments probably helps pay for the clearing process. Customers whose transactions do not require clearing are therefore not paying for it. It’s not a perfect system, I admit, and I hope there will be further improvements, although I think clamping down on fraud should take priority. I endorse Malcolm’s comments below.

This bit of the Convo began because you have a specific issue with a Which? company. I suggest that you ask the Which? Wills Team to explain in detail how they believe their money transfer system works as it is their explanation that is being disputed. We are in danger of taking this instance to make a more extensive criticism.

It may take a banker or a supplier who has direct knowledge of a topic to explain it to us. I have wished for a long time that experts are asked to contribute to particular questions raised in Convos so we have a better understanding of the issues involved. That’s because I’d like to learn the facts rather than jump (or be jumped) to conclusions.

We seem to be going around in circles here so I will now break the loop. After all, this conversation-system is for the benefit of all Which? members and it is now becoming a discussion between three people all wasting each others time because we all have different views on which it seems that we will never agree.

I would just like to make one final remark to malcolm r. This convo is not related to my issue with the Wills team – I direct you back to my original article which started this ball rolling. I recently raised the issue about the Wills team since I was very surprised that I should have to add a Which? department to the list of complaints I made in the original article.

As I said above. this is not something new, the Consumers Association, the BBC and the Office of Fair Trading all researched the issue of delayed payments back in 2003. Fourteen or fifteen years later the problem still exists. We can either sit back and quietly accept the situation like sheep making excuses as to why we consumers should be ripped off, or we can follow the lead of the Swedish people and insist that the movement of money should be much faster and that neither banks nor companies should be making profits out of consumer transactions. It isn’t just banks that are at fault, many companies use the delaying tactic to ease their cash flow or to make profits from the interest which, in better times, can be earned by holding on to and/or delaying payments. Anyone who has bought a house or dealt with probate from a will will have experienced the tactics that are used to delay payments.

There is no point at all in asking advice on this issue from a banker or supplier, it would be akin to the proverbial asking the turkey to vote for Christmas.

In order for this issue to be taken seriously I would throw down the gauntlet to the Consumer Association to resurrect their 2003 research and push hard for a change which is in line with the Swedish governments action to put an end to delayed payments of all kinds.

Phil, my comments were in direct response to your complaint about Which? Wills, and not the general topic. You seem dissatisfied with their explanation and I was trying to get the facts resolved.

Asking those directly involved in money transfers, who understand the system, is perfectly reasonable. The facts matter. Treating them as inevitably contributing deceit is no different to regarding a dissatisfied customer as unbiased. Perish the thought 🙂

I am in agreement with Malcolm on this and I have no objection to your proposal, it’s just that I do not give it the same priority as you do.

There is no obstacle to a supplier putting a refund into your bank account almost immediately if they have a mind to or have no internal systems or protocols [like verification and authorisation or audit approval] that impose a delay [as Which? might have in the case of your example].

Perhaps Which? should conduct a poll and see if members are in favour of giving priority to your recommendation.

Actually, Which? refunded my money in 2 working days. I’m happy with that. It shows it can be done – despite the sheep.

It shows it can be done”/i>. It was done! Glad to hear it was resolved. I suspect the sort of “standard” response Which? Wills originally gave was to ensure that the customer was informed of what might happen, and not chase them up until the time period had expired.

When I email some organisations I get a standard response, such as “We aim to reply within two working days, although at busy times you may experience a slight delay and we thank you for your patience. followed by “ I’ll be in touch when I’ve heard back and within two weeks.“. I know what to expect, but if I’m unhappy with the response I can phone to chivvy things along.

Stuart Millett says:
15 May 2019

Crickey, no wonder this country/ world is going down the drain when you have people [edited] apologising to banks for allowing banks to rip them off. Unreal to see these comments. It is quite obvious to any objective human that if you go into any shop and pay by card then that money is instantly taken from your bank, if the funda aren’t avaiable the payment will not go through and you won’t be able to leave with those goods. I know that system very well. You cannot short change the shop or the bank, no one needs to “hold” any money to get paid, ever! The same (very obviously) should be the case in reverse and if you can’t see through excuses claiming it isn’t then i feel sorry for you. Banks have caused enough hassle to us all, I’ve had to bail them out and still they continue to take the mick in cohorts with BB’s. Sad sad times.

(This comment has been edited as it did not meet the Community Guidelines. Remember to keep the conversation civil and to critique the argument, not the person making it. -Moderators)

MOOJI says:
17 January 2018

[Hello your comment has been removed to align with our commenting rules. Please ensure your comments are on-topic and are not rude or offensive to others. Comments which break our community guidelines will be edited or removed. Thanks, mods]

Maureen says:
22 May 2020

I’ve been waiting for a hotel refund – cancelled due to covid 19 so hotel is closed. The booking was for yesterday & I rang 4 weeks ago & was told the money would be back in my account by today at the latest. It’s not! Just called again & they said they have 60 days to refund! Why?

Maureen – Perhaps a sixty day wait for a refund is part of the hotel’s terms and conditions forming part of your agreement with them. I presume the sixty days is from the date of cancellation. So far as I am aware there are no regulations governing refunds and each company can set their own terms according to commercial considerations.

Maureen was told four weeks ago that she would receive a refund by today and now she has been told that there will be a further delay.

I suggest that Maureen makes a claim against her card provider using this Which? tool: https://www.which.co.uk/tools/s75-chargeback-claim/

Maureen’s ‘today’ was on Friday 22 May 2020, so I hope the problem has been resolved by now and that the hotel refunded her money months ago!

D Jones says:
28 July 2020

Hi there, a company that I have ordered parts from very good rating etc , all parts brand new ,I was sent these parts via post next day no problem there , after 3 months the parts become faulty so sent parts back they could not offer me replacements parts as the one I got was end of line ok fine – refund company told me that “Please note that it can take up to 14 days for the funds to show as cleared in your account.”
This is so aggravating that I have to wait so so long, BACS only takes 3 days to clear why cant they do this ….. Something does need to be done about all this waiting.

How about this, – you go online and place an order for an item that is clearly marked as being “in stock”, your payment is taken immediately and then … nothing! No acknowledgement email, no delivery details, and days later after chasing the retailer you learn they actually don’t have any stock of the item and in all truthfulness they probably never did. This is a favorite tactic of companies selling computer parts, it’s common practice for items that are in high demand. (Google – AMD GPU shortage). In the meantime your payment is sitting comfortably in the retailers account earning them interest. They give various excuses like “due to unprecedented demand” or “due to the Covid 19 crises”. The truth is they are making vast amounts of money by selling items that were never in their possession, and the longer they hold your funds the more they make. (In the case of unfulfilled AMD GPU orders it’s in the millions). As consumers we are getting shafted until we change the UK laws that allow this to happen.

Dee says:
22 March 2021

Hi, I ordered a mobile phone, changed my mind, 2 days later, cancelled the order, the order cancellation was verified and notice of refund was processed on 16 February stating it will take up to 14 days, but due to covid, may take longer, after numerous emails from myself, asking how long it was going to take as I needed the money, 17 working days later, I emailed again enquiring about my refund and got ignored, 3 emails later i decided to email from one of my other accounts and got a response back right away, the lady looked into the refund for me, confirmed a refund had been agreed and this will take up to 14 days, I emailed back informing her it has already been 17 days, I then received an email from another member of customer services saying as the refund is within the time limit the refund will take up to 14 days. 4 days later I received an email telling me, my refund will be paid on or before the 30 April. 2 months after the refund was agreed. I’m looking into charging the company interest and admin fees. Absolutely shocking !!