What is added back to the cardholder's line of credit when an item is returned?

When an item is returned, the original purchase amount is added back to the cardholder's line of credit. This process essentially reinstates the funds available for the cardholder to use since the transaction for the returned item is reversed. Returning an item nullifies the original sale, and as a result, the amount spent by the cardholder is restored, allowing them to have that amount available for future purchases.

This also maintains the integrity of the credit line, ensuring that the cardholder is not penalized for returning a product and facilitates the proper management of their available credit. The other options do not accurately reflect what occurs during a return. Transaction fees and processing fees are usually not refunded to the cardholder, and the new item's purchase amount is irrelevant in this context as it pertains to a completely different transaction.