‘Buy now, pay later’ (BNPL) schemes are quick and easy to sign up to at the checkout, but returning items isn’t always as straightforward.
You might use BNPL schemes when ordering multiple sizes or styles to try on at home, allowing you to spread or delay the payment for items you’ll likely end up returning.
But if you do decide to send items back, you might end up waiting longer for a refund than if you’d paid the full amount upfront.
Which? has heard from customers who have been left waiting for refunds or for outstanding payments to be settled after returning unwanted items purchased with a ‘pay later’ product.
If you’re thinking of using a BNPL scheme, it’s important to know how the returns process works and who to chase if your account isn’t updated.
Here, we look at some of the challenges customers have faced and explain how to secure a refund if you’re left out-of-pocket.
Have you ever had an issue with a BNPL scheme? Tell us about it using our new BNPL complaints form.
‘It’s been stressful and time-consuming’
Charlotte from Manchester is waiting to be reimbursed after sending back a pair of trainers to JD Sports in October.
‘I’ve used Klarna for about two years now,’ she told us. ‘I’ve never really had any problems but this refund issue has been quite concerning.’
Charlotte ordered the trainers online and selected Klarna’s ‘Pay in 3’ option. It does what it says on the tin, allowing you to spread the cost of your purchase across three separate payments.
‘I took back the trainers because they were too big,’ Charlotte explained. ‘I got an email from JD saying my refund was being processed, so they acknowledged that I’d sent them back, but the money’s not come back into my account.’
Charlotte’s tried to contact JD Sports but hasn’t heard back.
‘I went to Klarna and they told me to make sure I keep a record of everything I’ve done, and they will open a dispute,’ she said.
Klarna has since paused Charlotte’s outstanding payments until the issue has been looked at more closely.
‘I felt mortified because I don’t want to get penalised for something I could afford to pay in the first place,’ she explained. ‘It’s only £13 I’m waiting to be refunded but it’s more the fact that I don’t want my credit score affected, I don’t want those issues.’
Klarna says the customer’s credit score will not have been affected and apologised for the inconvenience caused.
Another JD Sports customer also experienced issues when returning something they’d bought through Klarna.
‘I returned a lot of items in-store in June and it’s been a mess ever since,’ they told us. ‘The employee refunded me part of the money by mistake and four months later I’ve been back and forth with Klarna and JD Sports over money owed. This has been very stressful and time-consuming.’
Klarna told Which? the vast majority of cases are resolved quickly and advises customers experiencing issues to get in touch with its customer service teams.
JD Sports declined to comment.
- Read more: four tips for using BNPL schemes safely
Unexpected payments for returned or failed orders
Other BNPL customers have had payments taken from their accounts unexpectedly, after returning items or not receiving them at all.
Vic was charged for repayments by Laybuy even after he discovered he would not be receiving his order from Tessuti, a luxury fashion retailer owned by JD Sports.
‘I ordered a pair of trainers with Laybuy and made the initial payment,’ explained Vic. ‘But a week after I placed the order I was told the trainers weren’t available.’
Vic got in touch with the retailer who said they’d process a refund, but two Laybuy payments were made in the meantime.
‘I basically paid for three payments, and two of the payments were made after I knew I wasn’t going to get the item,’ he said. ‘It was frustrating.’
Once the retailer confirmed the refund had gone through, however, Vic was reimbursed by Laybuy later that day.
Another customer of a different retailer told us they were charged late fees after the store didn’t inform the BNPL scheme that their return had been processed.
Though most BNPL schemes are interest-free, late fees can be much higher than the cost of your purchase, with PayPal charging £12 for missed repayments.
The customer was later refunded the late fees, but they had to repeatedly put pressure on the retailer to get in touch with the BNPL provider.
- Find out more: how BNPL can impact your credit score
How do BNPL returns work?
All returns are subject to the retailer’s return policy, so it’s worth double-checking this before making a BNPL purchase.
Stores might also have a slightly different approach to returns purchased with ‘pay later’ services in terms of how to make the return and whether they’ll accept exchanges.
Can I return in-store?
Some retailers only allow you to return items paid for with BNPL schemes via the post.
Take a look at the retailer’s ‘pay later’ policy before taking a trip to your nearest store.
Can I exchange items?
If you pay through Clearpay, you won’t be able to exchange items.
This means you’ll have to re-order separately and could end up paying double in postage costs, as is the case with M&S.
Laybuy allows you to exchange items. If the new item is more expensive, you can either create a new order with Laybuy or pay the difference directly with the retailer.
And with Klarna you can exchange with certain retailers depending on their policies.
Why hasn’t my account been updated straight away?
Retailers have to inform the BNPL scheme when your return has been received and accepted.
Until your return is processed, you’ll be expected to keep meeting repayments.
Alice Tapper, personal finance journalist and founder of Go Fund Yourself, has received almost 100 stories from BNPL users, many of them about complications with refunds.
‘Often it’s returns not being accepted or registered, and then them [the customers] being chased up by debt collectors,’ she told Which?.
How to get a refund and avoid late fees
Missing a repayment to a BNPL scheme could damage your credit score and stay on your credit report for as long as six years – so it’s important to try and resolve your issue as quickly as possible.
You also won’t benefit from Section 75 protection when using a BNPL scheme, as you would with other credit products.
Here’s what to do to speed up the refund process and avoid any late fees.
1. Contact the retailer
All the BNPL schemes advise you to get in touch with the retailer directly to try and resolve the issue.
Contact the store’s customer service team and keep a record of all your correspondence with them, including the date, the name of the person you spoke to, and any screenshots of messages.
The BNPL scheme might ask for this evidence if complications ensue.
2. Ask to pause your payments
If you’re concerned about outstanding payments or aren’t getting anywhere with the retailer, get in touch with the BNPL scheme as soon as possible.
Clearpay says it will contact the merchant directly to try and resolve the issue, while Laybuy say the refund process is managed entirely by the retailer.
It’s also worth asking the scheme to pause any outstanding payments.
Klarna advises you to report your return on their app, after which your payment will be frozen. Clearpay says it will move payments to a future date.
3. Attempt a chargeback request
You could make a chargeback claim to get your money back if you used your debit card to make payments.
This is where your bank claws back money from the retailer when something has gone wrong.
Unlike Section 75 claims, chargeback isn’t enshrined in law, and there’s not a great deal of evidence to show whether banks generally rule in favour of consumers with BNPL-related queries.
It’s worth giving it a try though if you’re not getting anywhere with the retailer.
4. Make a complaint
You can complain directly to the BNPL provider. Make sure you send any evidence of correspondence with the retailer to the BNPL scheme.
Get in touch with Which?
If you have used a BNPL scheme and struggled to get a refund, we want to hear from you.
Get in touch with us at firstname.lastname@example.org.
- Find out more: your returns rights