Making Amazon Returns? Think Twice Before Taking Amazon Credit

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It’s a decision you might regret. 

If you’re someone who shops on Amazon pretty often, then you’re probably someone who also returns items to Amazon on occasion. And there’s nothing wrong with that.

One of the benefits of shopping on Amazon is scoring free returns on items that don’t work out for you. And you’ll generally have a number of options for making returns, from dropping off your package at a UPS store to taking it into your nearest Whole Foods location.

You also get choices when it comes to getting refunded for purchases you’re sending back to Amazon. You could ask for the money to go back on the credit card you used to make your purchase in the first place. Or, you could get a credit to use on Amazon, which will be issued in the form of an Amazon gift card.

You may be tempted to just take the credit if you shop on Amazon often. After all, you’re likely to use it at some point, and if you’ve already paid your credit card bill, you may not care about getting a refund there. But getting an Amazon credit for a return could end up being a pretty unwise idea.

The danger of asking for an Amazon gift card

For people who shop on Amazon regularly, getting an Amazon gift card might seem like virtually the same thing as getting a pile of cash. After all, that money will go toward something. It’s just a matter of what and when.

But the problem with an Amazon credit is that you may be tempted to use that money for fun purposes since it’s sitting there, when in reality, you should be reserving it for an essential purchase.

Let’s say you bought a $20 pair of jeans for your child on Amazon, only they didn’t fit. Returning them makes sense. But now you still need to find your child a pair of jeans. If you take a $20 Amazon credit and then spend it on books or accessories, you’ll have to take $20 out of your bank account to buy the jeans you need. So all told, you’ll end up spending more.

That’s why having your credit card refunded is really your better bet. And if you’ve already paid the bill with that Amazon charge, rest assured you’ll get a credit on your next statement that can offset other purchases.

A risk-free option for Prime members

Although it’s not just clothing that Amazon shoppers tend to return, apparel is a common thing to return due to issues with sizing and fit. And so if you’re an Amazon Prime member, it pays to check out the Try Before You Buy program, which gives you a seven-day period to try on things like clothing and shoes before committing to a purchase.

Let’s say you use this program to order jeans for your child and the fit isn’t right. All you need to do is send them back to Amazon, and you won’t be charged a dime. And that way, you won’t have to deal with getting a refund in the first place.

Not every clothing item is available through Try Before You Buy. But if an item you’re interested in is available for a free try-on, you might as well take advantage.

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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Maurie Backman has positions in Amazon.com. The Motley Fool has positions in and recommends Amazon.com. The Motley Fool has a disclosure policy.

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