I've gotten refunds or store credit from flipkart, snapdeal, Jabong, etc. (Amazon I have got only refunds.)
When it's a faulty item that can't be replaced I always get refund and insist on it, if it's just something I ordered and didn't like I accept store credit, though maybe if you fight you can get a refund for that also. Read the terms and conditions on the site in question if you really want to know their legal stance, though it seems flexible based on how pissed off you are
The money is either credited back into the payment method, or a cheque is issued. For store credit nothing is returned.
I am trying amazon.in today, out of bad luck or something the payment failed via debit card.
Got placement mail but no mail related to transaction from bank yet, so I just cancelled the item.
and placed the order again with net banking, got confirmation email and transaction mail as well.
it was confusing because even after cancelling the item it said are you sure to place a duplicate order for 2nd attempt.