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What can happen if i make a large purchase and get a large refund in return

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luxlight
Regular Contributor

What can happen if i make a large purchase and get a large refund in return

This isn't a case of MS or fraud but if I ran up a large purchase on my card and then subsequently got a large refund on that card as well, could Discover take AA against me? It could potentially reach up to 90% of my overall credit limit if i try to put it all on one of my credit cards. I appreciate any advice you have for me. I have a clean file and have maintained 100% payment history with my discover card so I don't have anything that would spook them on my credit already.



FICO 8 Scores

TU: 743 [2 Inquiry] | EQ: 742 (FAKO) [0 Inquiry] | EX: 753 [4 Inquiries]


AAoA = 2 years, AAoOA = 3 year 1 months

Message 1 of 11
10 REPLIES 10
Anonymous
Not applicable

Re: What can happen if i make a large purchase and get a large refund in return

What’s your overall utility? If it’s low, I’d say your probably ok. If it’s high and you suddenly maxed out an additional card, they could get spooked. 

Discover is pretty solid. I put 94% utility on my card in Oct and let it report. I paid it off on the following statement and didn’t hear a peep from them. 

 

Message 2 of 11
luxlight
Regular Contributor

Re: What can happen if i make a large purchase and get a large refund in return

My current utilization is 8% on my discover card and 1% on my AMEX and both are paid off. Overall utilization of 6% for my total credit. Never carried a balance on my card and always paid in full each month. I just don't want to spook Discover thats all. 



FICO 8 Scores

TU: 743 [2 Inquiry] | EQ: 742 (FAKO) [0 Inquiry] | EX: 753 [4 Inquiries]


AAoA = 2 years, AAoOA = 3 year 1 months

Message 3 of 11
Anonymous
Not applicable

Re: What can happen if i make a large purchase and get a large refund in return

I think you’ll be ok. Are you gonna let the 90% utility report or will you pay it off/have it refunded before it reports? 

Message 4 of 11
CreditInspired
Community Leader
Super Contributor

Re: What can happen if i make a large purchase and get a large refund in return

OP, What do you mean by large refund?

Are you saying you make a large purchase (90% UT) and then return the item for a credit?

Or are you saying make a large purchase, then make a large payment before statement cuts?

|| AmX Cash Magnet $40.5K || NFCU CashRewards $30K || Discover IT $24.7K || Macys $24.2K || NFCU CLOC $15K || NFCU Platinum $15K || CitiCostco $12.7K || Chase FU $12.7K || Apple Card $7K || BOA CashRewards $6K
Message 5 of 11
luxlight
Regular Contributor

Re: What can happen if i make a large purchase and get a large refund in return

Large purchase then return but i don’t plan on letting it report on statement


FICO 8 Scores

TU: 743 [2 Inquiry] | EQ: 742 (FAKO) [0 Inquiry] | EX: 753 [4 Inquiries]


AAoA = 2 years, AAoOA = 3 year 1 months

Message 6 of 11
trusty
Frequent Contributor

Re: What can happen if i make a large purchase and get a large refund in return


@luxlight wrote:
Large purchase then return but i don’t plan on letting it report on statement

What do you mean by, "don't plan on letting it report?" Are you going to buy something else large?

 

It just depends on the card issuer. Some issuers will send out a refund check if the credit exceeds a certain amount.


But, it definitely falls under suspicious activity, even if unintentional; because making a large purchase and then obtaining a refund can be considered a form of money laundering.

 

Best thing to do is probably charge some other things to get rid of the credit, or greatly reduce it, before the statement cuts. You don't want to get into a habit of receiving refund checks. That's the kind of thing that can lead to adverse action.

Message 7 of 11
longtimelurker
Epic Contributor

Re: What can happen if i make a large purchase and get a large refund in return

The thing issuers are going to be most sensitive about is if the original purchase was (apparently) to meet a SUB, and once that had been received, the item was returned for credit.   These days, most issuers will attempt to claw back the SUB (which can be hard if it has been transferred etc).   But it sounds like this might not apply in your case.

 

Basically anything unusual (as defined by the issuer) COULD be grounds for AA, but I don't think doing it once, outside the SUB situation, is going to cause much concern.    These things happen in good faith (expensive item needs to be returned) just don't establish a pattern of doing it.

Message 8 of 11
Anonymous
Not applicable

Re: What can happen if i make a large purchase and get a large refund in return

PayPal certainly doesnt like it. My BF charged something and was notified by the company that they returned the money because the item was out of stock and he went immediately and bought the item from another seller. He paid the bill in full before the statement. They said it looked suspicious and sent a letter closing his account. He called them but they had closed it. Since this was the first time he had done something like this and had been a long time customer on ebay he wasnt impressed with them so he didnt open a new one.

However, we recently bought something from home depot on the card and paid the bill a couple weeks later. He returned it and they put the money back on his card which caused a credit. He called the credit card rep and told them the situation and they deposited the overage amount into his checking account (not even the same account we paid the bill from).

So, two different cards and two different situations.
Message 9 of 11
Kforce
Valued Contributor

Re: What can happen if i make a large purchase and get a large refund in return


@trusty wrote:

@luxlight wrote:
Large purchase then return but i don’t plan on letting it report on statement

What do you mean by, "don't plan on letting it report?" Are you going to buy something else large?

 The CC issuer can see everything, it does not need to report on the statement to be an item of concern

 

But, it definitely falls under suspicious activity, even if unintentional; because making a large purchase and then obtaining a refund can be considered a form of money laundering.

(+1)


 

Message 10 of 11
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