Product: Credit card or prepaid card

On XX/XX/XXXX my husband used my discover card to make a purchase on XXXX. He received the product and was unhappy with it due to defect we returned the product on XX/XX/XXXX per XXXX return policy and he requested a giftcard at that time. XXXX issued the giftcard balance and he attempted to use it they withheld refund and sent him an email they thought fraud took place on account. We attempted to contact them to get issue corrected and they kept informing us the credit balance would get reversed. After a few days we noticed it did not take place so we contacted Discover to dispute the XXXX transaction they told us we had to wait 10 days to allow the merchant to try to resolve the matter time passed and it didn't happen after several calls to XXXX we called back and asked to launch an investigation 10 days later as informed. We were assured it would be resolved and received a temporary credit the first time XXXX informed Discover they issued a refund but did not mention they held it due to a false suspicion of " fraud '' so we sent proof they issued it and turned around and reversed it directly from the XXXX account. They told us they would further investigate. A month later they stated that merchant informed they would issue refund so to avoid the back and forth between companies I called them on 3 way at that time XXXX informed me and the Discover agent they would further review the refund issue and then get back with me. 10 minutes after that call they sent me an email stating that they would not be able to issue refund due to disputing with card company and to handle refund process directly through card issuer which, I immediately called Discover and informed them info on what I received and sent email to dispute portal. I received a notification they were finalizing dispute credit so I thought the issue was resolved. I then received an email in XXXX of XXXX stating they received additional documentation from XXXX and did not go in my favor I immediately called because I don't have the product nor credit from XXXX so how did it go in their favor? I was then told by an agent that XXXX told them they didn't receive the merchandise back so for several months we were supposedly discussing a refund for merchandise that was not received and it was conveniently after the tracking info expired because XXXX only keeps it for 4 months but we have the return tracking slip and sent it over to Discover they are still stating after a review of info they are going with XXXX and the charge remains. They are expecting interest off of merchandise that was returned and that I have proof of it being returned via tracking slip as well as XXXX website and all XXXX has to say is they didn't receive it and it goes in their favor there is some sort of shady business practice going on and I don't believe I should pay for something I don't have. I have actual proof it was returned from their website and our tracking info. I feel consumers should be protected when following everything within policy the return was completed within return policy but funds were not reversed nor refunded back to credit card. Discover did not do their due diligence on account to reverse funds. I attempted to contact the executive office with no resolve.