Waiting for a refund is frustrating when you have already returned the item and the retailer says it has been processed. The delay usually comes from the several steps between the merchant pressing “refund” and the money appearing in your account. This guide explains those steps, the typical timeline for each payment type, and when to escalate. It is part of the bank accounts hub.
How Refunds Work in Canada
A refund is a purchase in reverse: the money flows from the merchant back to your card, over the same payment network as the original purchase. It isn’t instant.
The refund process:
- You return the item and the merchant approves the refund.
- The merchant’s point-of-sale system sends a refund request to its payment processor (such as Moneris, Square or Stripe).
- The processor submits the refund to the card network (Visa, Mastercard or Interac).
- The network routes the credit to your bank.
- Your bank applies the credit to your account.
Each step takes time, and the total is typically 3 to 10 business days.
Refund Timelines by Payment Type
| Payment method | Typical refund timeline |
|---|---|
| Visa or Mastercard credit card | 3 to 10 business days |
| Visa Debit or Debit Mastercard | 3 to 5 business days |
| Interac debit (in store) | 3 to 5 business days |
| Interac e-Transfer | Immediate to 1 business day once the merchant sends it |
| PayPal | 3 to 5 business days to a bank account; immediate to a PayPal balance |
| Other payment apps | Varies by platform |
| Gift card | Immediate or the next business day, back to the card |
Whether a debit card runs on Interac only or also on Visa or Mastercard depends on the card; how a Canadian debit card works explains the difference. How e-Transfers move is covered in the Interac e-Transfer guide.
Why Refunds Can Take Longer
The merchant hasn’t processed it yet
The most common cause: the store approved the return, but the refund hasn’t actually been submitted to the payment processor. Some retailers process refunds in weekly batches.
What to do: ask the retailer for written confirmation (an email) that the refund was processed, with the transaction reference number. It proves the refund was started and gives you something to quote to your bank.
Payment network processing time
Once the merchant submits the refund, it typically takes one to three business days to travel through the card network. Neither your bank nor the merchant can speed that up.
Your bank’s posting time
When the refund reaches your bank, it may show as pending for one or two business days before it is posted and available. Pending transactions explains how pending items work.
When to Escalate
After 5 business days with no refund, contact the merchant and ask for confirmation it was processed, with the transaction ID or authorization number.
After 10 business days, if the merchant has confirmed the refund and it still hasn’t arrived, contact your bank with the merchant’s confirmation and ask it to trace the credit.
If the merchant won’t refund or won’t confirm, you can ask your bank to open a chargeback dispute (for credit card purchases and Visa Debit or Debit Mastercard purchases). The bank investigates and may reverse the original charge if the merchant can’t justify it.
Refunds to Replaced or Closed Accounts
Expired card: if the card expired and was replaced on the same account, the refund normally reaches the account without any action from you.
Replaced card (lost or stolen): if the card number changed because the old card was cancelled, the bank usually still routes the refund to your account, since the card is linked to the account. If it doesn’t arrive, the bank’s card services team can trace it.
Closed account: if the account behind the original purchase has been closed, the refund is returned to the merchant, and you need to ask the merchant to refund you another way (a cheque or a transfer to your new account). That can take several weeks. How to close a bank account covers what to settle before closing an account.
Refund Timing vs Return Policy
A retailer’s return policy and the refund timeline are separate. The return policy decides whether you can get your money back; once the refund is approved, the payment network decides how long it takes to arrive.