Is it legal for a company to erroneously charge you and refund you in credits?
<p>I was recently charged a $5 fee in error by a California based tech company. I disputed the charge via app and they issued me a “refund” in credits for future use of their service. I have not been able to contact the company in regards to getting my payment method refunded. I’m upset at this shady business practice, because I am out of the $5 for their error no matter what and the only way I can experience the refund is if I use their service again. Personal feelings aside, I’m genuinely interested if this is a legal way to conduct business. </p>

<p>Can a company erroneously charge customers and issue credits as refunds instead of refunding the payment method directly?</p>

<p>No, this isn't legal. Had you authorized the purchase, then it would have been legal; this is similar to a store credit for returns without a receipt. But since you claim they charged you in error and you did not authorize the transaction, then they must refund the money directly to you (unless you agree to another method of compensation). In fact, a direct refund should have been the default unless they gained your permission to receive it in a different form.</p>

<p>Why are you unable to contact the company? That seems like the simplest resolution so this.</p>

<p>So much of this depends on the TOS (Terms of Service) with the company and/or the App. Read it. The TOS may very well state there are cancellation fees for their services, and their method of refunding such fees is in App credits and not cash. You agreed to the TOS when you clicked through the TOS to use the App. See <a href="https://en.wikipedia.org/wiki/Click_wrap" rel="nofollow noreferrer">Click wrap Contract (Wikipedia)</a>. You can also contact the <a href="https://www.bbb.org/en/us/ca" rel="nofollow noreferrer">California | Better Business Bureau</a>.</p>

united-states california business