Courtesy Credits, Partial Refunds sent to Amazon Gift Card Balance

[shanesnh]

I am pretty certain than courtesy credits when a merchant messes up are considered rebates or discounts on purchase price and NOT TAXABLE. (They are essentially a form of customer service rather than taxable income).

Please advise.

Further, a partial refund also would be NOT TAXABLE since it's just taking money off the purchase price.

Many times, Amazon will NOT refund these smaller amounts to the original credit card and ONLY to your "Amazon Gift Card" balance or maybe a special section for "courtesy credits". 

I would assume it doesn't matter where the credit or partial refund goes and that it would still be NOT TAXABLE. Sometimes it goes into and sometimes just directly into your Amazon Gift Card balance.

Please advise.

Example:

Bought a $300 product. Complained about an issue. Caused even more issues. They erroneously refunded the entire $300 order even though they weren't supposed to (Manager put the wrong code and essentially just told me to keep it which was basically telling me to steal it: WRONG). Spoke with them like 5+ times to fix their multiple problems. Their solution was if I pay for it again (which I should), they'd give a $100 Amazon Gift Card for the hassle "please contact us back so we can issue a $100 gift card as compensation for the inconvenience." from one Manager and the person I spoke with later after paying the $300 again, they sent an email with "I would like to advise you that I have processed a refund for $100 to your amazon gift card balance." So I assume this is also either a courtesy credit as "as compensation for the inconvenience" or more likely a partial "refund for $100 to your amazon gift card balance.". 

Please advise. Thanks.

[robtm]

You have already paid (or will pay) taxes on your original 300 so any refund, rebate, or credit you receive is only a return of your own money you've already paid taxes on  and is not taxable. It doesn't matter how you receive it - cash, check, credit card or Amazon gift card, etc.

[Opus 17]

You are generally correct that this kind of adjustment is considered a non-taxable discount or price adjustment.  The only time it would be taxable is if you get more back than you paid.  For example, if you paid $300, get a refund and keep the product, that is not taxable because the company is allowed to give you the product for free and that does not become taxable income to you.  However, if you ended up with a free product, your $300 back, and another $100 gift card, the $100 gift card is technically taxable income (you got back more than you paid).