Yes. If points were earned for a purchase that subsequently returned or cancelled, the points earned will be deducted from your points balance. This could cause your points balance to be negative. For example, should you return a Business Builder kit where you earned enough points to redeem for rewards, then returned the kit, your return amount may be less the reward you used. Similarly, if you choose to redeem points on an order, which is then subsequently returned, the points used on that order cannot be reimbursed, unless the order was cancelled as a result of a stock out, back-ordering issues, or the order included close-out items.
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