BNPL and Returns: What Happens to Your Payments?

Buy Now, Pay Later (BNPL) has become a popular shopping method for everything from gadgets to clothing. It offers flexibility, allowing you to split payments into installments. BNPL and returns, however, can sometimes create confusion, as customers wonder how refunds are handled when payments are still ongoing. However, when you return an item or cancel a service, your BNPL payments don’t automatically stop.

The refund process can be complicated. You might still be required to make payments until the refund is processed. This blog covers how BNPL returns work and what to expect during the refund process. It also includes tips to avoid common pitfalls, which will ensure you’re not caught off guard when you return a purchase.

How Returns Work with Traditional Payments vs. BNPL

Credit Card or Debit Card Purchases

Refunds are processed directly back to your card. It is typically within 3–10 business days. The merchant handles the return, and the transaction is reversed without involving a third party.

BNPL Adds a Third Party to the Process

With BNPL, the merchant initiates the return. However, the BNPL provider must update your repayment schedule accordingly. Refund timelines can vary based on how quickly the merchant and BNPL provider coordinate, which may cause delays compared to traditional payments.

What Happens to Your BNPL Payments When You Return an Item?

Scenario 1 – You Return Before Any Payment Is Made

Some BNPL platforms may cancel the entire installment plan. Others will still charge the first installment and refund it later.

Scenario 2 – You Return After One or More Payments

You may continue making payments while the return is being processed. Once the return is confirmed, the BNPL provider will issue a partial or full refund based on the details.

Scenario 3 – You Return Only Part of the Order

The refund will be adjusted according to the items you returned, and your remaining payments will either be reduced or recalculated.

Platform-Specific BNPL Return Policies

Klarna

Refunds are typically processed within 5–10 business days after the merchant confirms the return. If a return is initiated, you can pause your payments through the Klarna app.

Afterpay

You must continue paying installments until the return is approved. Refunds are issued directly to your original payment method, and no manual cancellation is needed.

Affirm

Refund amounts are applied toward your outstanding balance. If the refund exceeds what you owe, you’ll receive the difference.

PayPal Pay in 4

PayPal handles refunds, which are usually reflected in your linked payment method. You may cancel or adjust remaining payments accordingly.

Zip (Quadpay)

Refunds appear as credits on your Zip account, but you may need to keep making payments until the credit is applied.

Also Read: Using BNPL to Bridge Gaps Between Paychecks

Common Issues Consumers Face with BNPL Returns

Payment Delays During Return Processing

You may still be charged while the merchant processes your return. It can take 7–14 days or longer to fully resolve.

Confusion Over Who to Contact

It can be unclear whether to contact the merchant or the BNPL provider for help. This confusion can cause frustration and result in delays in resolving the issue.

Incomplete or Partial Refunds

The BNPL platform may not automatically adjust your payment plan if you return only part of your order. Correcting this often requires manual follow-up.

Missed Payment While Waiting for Refund

Late fees may be applied if you pause payments incorrectly or forget your due dates. Not all BNPL providers offer a “pause” function, making it easy to miss payments.

How to Handle Returns Smoothly When Using BNPL

Start the Return Process Through the Merchant First

Always initiate returns through the store or brand, not directly with the BNPL provider. This ensures the merchant handles the return properly before involving the BNPL provider.

Notify the BNPL Provider ASAP

Report the return as soon as possible using the app or account portal. Some BNPL platforms allow you to pause installments or flag the order for easier management.

Keep All Documentation

You must save all return confirmation emails, tracking numbers, and refund receipts. You may need proof of return to the merchant and your BNPL provider.

Monitor Your BNPL App or Dashboard

You must keep an eye on your BNPL app or dashboard. This way, you will get updates. Knowing about payment pauses, refunds, and order status is essential. If there are delays or the status hasn’t updated within the promised window, don’t hesitate to follow up.

Also Read: Can Parents Use BNPL for School Expenses?

When to Use BNPL for Purchases You Might Return

Avoid Using BNPL for Uncertain or High-Risk Items

It’s best to steer clear of BNPL for items like clothes. This comes with unpredictable sizing or products with long shipping delays and potential return fees. These factors can complicate the refund process and your BNPL payments.

Read the Return Policy Before Checking Out

You must check the return policies of both the merchant and the BNPL app before completing a BNPL purchase. You need to confirm return windows. You must also check restocking fees and the refund process. This will help you avoid any surprises down the line.

Use Beem to Manage BNPL Refund Tracking and Alerts

Beem’s AI Wallet can help track BNPL refunds and alert you to upcoming payments, even while returns are pending. This prevents missed payments and unnecessary fees during the refund process.

Final Thoughts – Don’t Let a Return Turn Into a Financial Headache

BNPL offers great convenience but can introduce complexity when returns are involved. To avoid headaches, you must understand your provider’s return policy.

You should follow all necessary steps and keep track of every piece of communication. With careful planning and tools like Beem to manage refunds and payments, you can return items responsibly. Beem’s Everdraft™ provides short-term, interest-free, instant cash up to $1000 to help bridge cash flow gaps without turning to high-cost borrowing. This is without the added financial stress.

FAQs About BNPL and Returns: What Happens to Your Payments