Holiday shoppers who used “buy now and pay later” to finance their gifts may soon be surprised: Returns can be more difficult than when they shop with cash or credit cards.

Disputes and returns are a frequent concern for buy-now,-pay later users, according a September 2022 Consumer Financial Protection Bureau report. Dispute resolution is the most common complaint about buy now/pay later in the CFPB Consumer Complaint Database.

If you are familiar with the process, it is possible to make a seamless return using buy now, pay late. You should contact the retailer to make the return. Follow up with the buy-now, pay-later provider if necessary.

Learn more about Buy now, Pay Later Returns

You can use a pay now provider such as Afterpay, Affirm, or Klarna to split your purchase into smaller, often interest free installments, while the provider makes full payment.

This means that if you return an item, the refund is sent to the provider who will pay it back later. The provider will apply the refund to your account. There is usually a delay.

Buy now, Pay Later loans are quick to turn around — payments are due every 2 weeks for standard pay-in-4 loans. You can also get stuck paying on a gift you have already received

This industry is also largely unregulated. Consumers have less protections than other types of financing if a package is lost or arrives damaged.

“Returns may be a problem with buy now, and pay later because credit cards have specific dispute provisions that apply to them that may not exist in BNPL space based on the lender,” Laura Udis is senior program manager for small dollar marketplace and installment lending at CFPB.

Udis notes that not all providers offer protections. For example, PayPal and Klarna have formal protection policies that may increase the chance of a refund.

Klarna claims that its buyer protection policy is designed to ensure shoppers can shop safely with the app.

“If goods don’t arrive or there are problems with them, we have a clear procedure to help customers resolve any issues and ensure that no customer is unfairly liable to purchase a product,” Kristina Elkhazin from Klarna North America stated in an email.

But, returns are subject to the policy of the store. Shoppers should make sure that returns are approved by the store prior to contacting the buy-now, pay later provider.

How to make a buy now and pay later return

These steps will help you return holiday gifts that were purchased using buy now, pay later.

You can check the return process for buy now, pay it later providers: Many providers have a webpage explaining the process. This process may vary from one provider to the next. Find out what you can expect from a refund, and the timeline.

You can return the gift to the retailer. Providers will direct customers to the retailer. Make sure to check the store’s returns policy. To avoid losing your order, you can return it in person. You should bring all relevant documents, such as a receipt or an email confirmation. You may be eligible to exchange the receipt or receive store credit if you do not have one. This depends on the policy of each store.

Keep track of transactions: Keep copies of all transactions (including returns and exchanges) as well as any store credit issued. Tracking numbers are required for returns that were mailed. Keep track of all communications with the store.

Follow-up with the buy now and pay later provider: Depending on which provider you choose, some providers might ask you to report a return via their app or website. Others may not require any action.

Continue to make payments: After you return the gift, continue paying your loan. You may have to wait for a refund or be penalized if you fail to make a payment. Afterpay and other providers may allow you to delay a payment until you have made a return.

You may file a dispute. If you have not received your refund within a reasonable time (from a few days up to a few months depending on whether the provider is a buy now, pay later provider), contact the customer service department of the provider for further information. You can file a dispute against the provider if the store refuses to accept your return. You can log in to your account and complete an online form.

This article was written and published originally by The Associated Press by NerdWallet.