A customer comes into your store to request a refund. As a business owner, what are your legal obligations? How do you issue a refund to a credit card in-store? Is it possible to refuse a refund request? In this article, we’ll address the most commonly asked questions about in-store card refunds, including about the process and rules you need to follow.

Key takeaways

• The Consumer Code and the Civil Code in France both protect customers with regard to refunds.
  
• Businesses must refund customers when: goods don’t comply with sales contracts, there are hidden defects, or the business failed to meet delivery deadlines. Refunds must be made to the original payment method used for purchase.
  
• The business’s bank or payment terminal provider must activate the “credit” option on the electronic payment terminals (EPT) for the business to be able to issue refunds.
  
• To issue in-store card refunds, businesses: select the “credit” option on the EPT, authenticate the transaction, enter the refund amount, and ask the customer to insert or tap their cards.
  
• Refunds typically take 2–10 business days to process.
  
• Businesses must retain refund receipts and record transactions for tax purposes.
  

French law on refunds

The Consumer Code and the Civil Code provide a strict framework that governs refunds in France. According to Articles L217-3 through L217-20 of the Consumer Code, a seller must deliver a product that complies with the sales contract. If they fail to comply on the delivery date (e.g., the product doesn’t match the seller’s description or it has been incorrectly assembled), the customer can ask for a refund—assuming it’s not possible to repair or replace the product within a reasonable timeframe (e.g., because repair is too costly or the product has been discontinued). The customer has two years from delivery of the new or used product to use the legal warranty for contract compliance and obtain a refund.

When the customer notices a serious defect after purchasing a product—rendering it unusable—they can apply the legal warranty against hidden defects. According to Civil Code Articles 1641 to 1648, the customer has the right to demand a full refund for up to two years after discovering a defect.

If the seller does not meet the delivery deadline for the product or does not deliver it within a reasonable timeframe, the customer can demand a refund after unsuccessfully notifying the business. The seller must refund all amounts paid within 14 days following the date of the contract’s termination, according to Articles L216-6 and L216-7 of the Consumer Code.

Article L217-17 of the Consumer Code requires that the business refund all amounts due using the same payment method as the purchase, unless the customer specifically requests otherwise. Therefore, for a refund to be in compliance, if the customer paid for the purchase with a bank card, the business must credit the amount of the purchase to that same card.

When must a business issue an in-store card refund?

Except for the legally required instances (i.e., noncompliance, hidden defect, failure to meet the delivery deadline), businesses are not required to provide refunds to customers, especially if the customer has simply changed their mind.

However, businesses are free to set their own refund policies to supplement legal warranties. Offering customers additional warranties is a common retail strategy businesses use to retain customers.

Processing refunds on an electronic payment terminal (EPT)

For a business to be able to issue refunds, the bank or payment terminal provider must activate the “credit” option on the electronic payment terminal (EPT). The business needs to contact its bank or authorized entity to verify that its merchant identification (ID) allows credit transactions. Once the financial institution has authorized credit transactions, the business can process refunds.

In-store card refunds

In-store card refunds take place in several important steps. The business must do the following:

• Locate the “credit” option on the EPT.
  
• Insert the merchant ID card or enter the administrator’s code to authenticate the transaction. Note that an administrator is often required to authenticate EPT refunds.
  
• Enter the exact amount to be refunded in the register.
  
• Ask the customer to insert their card or tap to use the EPT’s contactless option. They must enter a personal identification number (PIN) or use biometrics to validate the transaction.
  

The EPT will then issue a paper or digital (e.g., Short Message Service (SMS), email) receipt to confirm the refund.

In-store card refund timelines

Bank card refund timelines depend on the financial institution, the card type, and the transaction date. For example, a refund initiated at the end of the week, on the weekend, or on a holiday can take longer to credit. Financial institutions typically credit funds to a customer’s bank account within 2–10 business days.

Following an in-store card refund

After an in-store refund has taken place, the business must archive the receipt and record the transaction in its bookkeeping software. This maintains transaction traceability, in compliance with tax office regulations.

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