Protestant
Are indulgences buying forgiveness?
An indulgence never forgives sin — only sacramental confession does that; it remits the temporal punishment that can remain even after guilt is forgiven, and since 1567 the Church has explicitly forbidden attaching any monetary payment to their granting.
Catholic teaching
Grounded in the doctrine of the communion of saints, an indulgence applies the merits of Christ and the saints to remit temporal punishment due to already-forgiven sin, obtained through prayer, works of charity, or penance — abuses of preachers selling indulgences were condemned by the Church herself at Trent, not the doctrine.
Biblical foundation
Paul speaks of applying his own sufferings for the good of the Church (Col 1:24) and of a binding and loosing authority given to the apostles that extends beyond mere preaching (Matt 16:19; Matt 18:18), the same authority the Church exercises in granting indulgences from the treasury of merit.
Scripture references
Historical evidence
The Council of Trent's decree on indulgences (1563) explicitly condemned 'all base gain for the obtaining of indulgences,' and Pope St. Pius V abolished the office of indulgence-preachers connected to alms in 1567, showing the Church corrected the very abuse the Reformation protested.
The Church Fathers
“There is an ecclesiastical discipline... which... makes satisfaction more abundantly by works of mercy... for prayer alone would not so avail.”