MDSE Credit: What is it and How Do You Use It?

If you have ever made a return to a store, chances are that you have encountered MDSE credit. The cashier likely gave you the option of cash back, a refund to your credit card, or money on a store gift card. Sometimes, you might not even be given a choice about how you receive your refund. What exactly is MDSE credit and how do you use it? 

MDSE credit stands for merchandise credit. You will receive the same amount that you spent on the item loaded onto a gift card for you to spend in the store as you see fit. It is most often given to those who attempt to make returns without a receipt. 

Before you accept merchandise credit at a retailer, here is everything you need to know about it. 

When is MDSE Credit Given? 

Imagine that you bought a new shirt last week but didn’t have time to try it on before heading to the register. When you got home, you found out that the shirt was too small and needed to be returned. Unfortunately, you somehow managed to lose the receipt in the process of your busy day. 

What will that mean for your return? 

Most of the time, a retailer will still accept the return of your item even without a receipt. If you no longer have record or proof of your purchase, they may not be able to issue you a complete refund though. You will not be able to receive your money back in cash or as a refund to your debit or credit card. 

When you make a return without a receipt, you are often going to be awarded MDSE credit or merchandise credit instead of cash. 

Merchandise credit functions very similarly to a gift card. However, it will not have an even amount on it like you might see with a gift card. Gift cards may have balances like $25, $50, or more. A merchandise credit will be for the exact amount you spent on the item you are trying to return. 

Apart from this main difference, the gift card will spend the same as cash inside the store. You will not be able to spend it at another retailer, but you can use it to purchase anything inside of the store where you made the return. 

MDSE credit

Why Do Retailers Offer MDSE Credit? 

Many people wonder why a retailer would be inclined to offer merchandise credit instead of a direct refund. The answer is rather simple. It protects the store from losing money in a couple of key ways. 

The first is that it secures the profit made from the original sale. Because you can only spend the merchandise credit in their store, they are ensuring that they will still make the same profit at a later date. In essence, they are not really losing the sale if they offer you merchandise credit instead of a complete refund. 

The other answer is that it prevents loss due to theft. Shrinking costs retailers hundreds of billions of dollarseach year. Return fraud is one of the issues that is seriously causing harm to the retail industry. 

Stores can lose money by offering cash refunds on stolen goods or goods that were purchased with counterfeit money. By issuing merchandise credit, they are offsetting the potential loss that can accompany return fraud. Scammers won’t benefit from return fraud as much if they are issued MDSE credit instead of cash. 

Issuing Merchandise Credit

If you want to make a return but lost your receipt, you should be prepared to receive MDSE credit in place of cash. It still spends the same as cash, but it limits you to spending only with the issuing retailer. It is still preferable to holding onto an item that you will never use though! 

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