What is a credit note?
A credit note is a paper or electronic note issued by a business to a customer in place of a refund. A credit note acts like a voucher that can only be used for the particular shop, chain of shops or business that issued the credit note.
Is it legal for a business to offer me a credit note instead of a refund?
Yes, businesses are legally allowed to offer you a credit note in place of a refund. In some cases a shop may give you a credit note as a goodwill gesture, for example if you change your mind about something you bought (for products bought in a shop, you do not have a legal right to a refund because you change your mind).
However, if you are legally entitled to a refund, then the business cannot insist that you accept a credit note or voucher instead (except in very limited cases for package holidays – see below).
In general terms, you have a legal right (also called your statutory right) to a refund for:
- Items or services bought online which you cancel or return during the ‘cooling off period’
- Flight cancellations and package holiday cancellations – see more below
You also have a legal right to certain remedies if a product breaks, is not fit for purpose or does not do what the advert or seller said it would. A remedy could be a repair, replacement or a refund.
Do I have to accept a credit note or voucher?
In general, you do not have to accept a credit note if your complaint is covered by consumer law (except in very limited cases for package holidays – see below). Instead, you can insist on a repair, a replacement or a refund.
If you accept a credit note you may not be able to ask for a refund afterwards.
Airline credit notes and vouchers
Where your flight is cancelled, you are entitled to a choice of:
- Refund of the cost of your ticket within 7 days or
- Re-routing to your final destination at the earliest opportunity or
- Re-routing at a later date at your convenience, subject to availability of seats
A refund in this case means a cash refund (or a refund onto the original method of payment, where you paid by debit card or credit card or by cheque or bank order). Airlines can offer a refund by means of a credit note or a voucher but you do not have to accept this and can insist on getting a full refund.
What is the State-guaranteed credit refund note?
By law, tour operators and travel agents must give you a refund on cancelled package holidays within 14 days. You can read more about consumer rights and package holidays.
However, on 8 May 2020, the Government agreed that tour operators and travel agents can offer customers a State-guaranteed refund credit note for package holidays, where they are not able to provide a cash refund or a full cash refund. On 19 June 2020, emergency legislation (pdf) on the State-guaranteed refund credit note became law.
The refund credit note will work as follows:
- You are still entitled to a cash refund: the refund credit note will have a future date (the redeemable date) that it can be exchanged for a cash refund or to book a replacement holiday
- It can be for the full value of the refund or for part of the refund, along with part cash
The refund credit note is State-guaranteed. This guarantees you get your money back if the travel agent or tour operator goes out of business and cannot pay back its customers.
Read more in our document on Travel plans and COVID-19.
The Competition and Consumer Protection Commission (CCPC) has more information about faulty goods and changing your mind. You can get information about your consumer rights and COVID-19 in the CCPC’s COVID-19 information hub.