Unsurprisingly, they are a headache for all Shopify store owners, who are faced with lost cash flow, revenue, and time.
One wiser way to manage refunds is to offer your customers Shopify store credit rather than cashback. This works well for buyers who have changed their mind about the products they purchased.
But what is store credit? And how can you implement it into your Shopify store? Let’s tackle these vital questions in this article.
What is Store Credit?
Store credit is when a store offers an amount of credit that its customers can use to purchase its products. This is generally non-transferable to other stores or brands.
Store credit is usually granted when a customer returns items that are not eligible for a refund. Ensure your refund policy page states clearly when your customers cannot get refunds.
It differs from a discount or sale in that store credit applies to a particular buyer. Also, it does not expire like a temporary discount or promotion.
Benefits of Issuing Store Credit in Shopify Stores
There are several reasons why the world’s most successful retailers all use store credit. The bottom line is that it gives you flexibility and additional tools to help inspire your customers spending and loyalty.
Here are the top three benefits of giving your customers Shopify store credit.
Better and Long-Term Customer Loyalty and Retention
As IBM's report, ‘The more you stick with a brand, the more likely you are to become a brand advocate.’
In other words, store credit gives your customers an added incentive (aside from great products and customer support) to return to your Shopify store instead of looking elsewhere.
Encourage Your Customers to Spend More
You can use store credit to encourage your customers to spend more money at your Shopify store.
GE Capital once did a study on retailer-branded credit cards (a type of store credit) and found that they increased frequent visits by 29%. Also, shoppers typically spend more and exceed their store credit, resulting in higher sales.
Shoppers also feel more comfortable spending more when online stores offer reasonable return policies. And the store credit can help you with that by allowing for a more flexible return procedure.
Lose Less Revenue to Returns
Returns can put your Shopify store in a bind. You want to be flexible and give your customers a good, satisfying experience. However, returns equal lost revenue, period.
Offering store credit is one way to avoid losing sales on returns and help turn them into exchanges.
Store credit allows you to accept returns without a receipt, making your return policy more customer-friendly. This also secures the money stays in the business, which eases the profit burden on your bottom line.
Can You Issue Shopify Store Credit to Your Customers?
Unfortunately, Shopify does not have functionality that allows you to issue store credits to your customers.
If you signed up for Shopify Plus plans or higher, you could issue a gift card equal to the total cashback. Or, you can give them discount codes instead.
If you think these alternatives do not fit your needs, your last resort is to use a Shopify store credit app.
Most will charge you a monthly subscription fee plus a small fee per transaction. In addition, the app may provide a maximum credit balance based on your subscription level.
Use a Shopify App to Issue Store Credit for Refunds
This tutorial will use the 'Gift Cards & Loyalty Program' app to issue Shopify store credit for returns. Here is how:
- Add this app to your Shopify store.
- Keep the Rise dashboard open. Open a new tab to visit the Orders page from the Shopify dashboard.
- Select the returned order you want to issue Shopify store credit for.
4. Click the More action button and select the Refund with store credit option.
5. A new window will appear. Here, there are several options you may want to tweak:
- Which products do you issue a refund for?
- Do you want to restock or not?
- Do you want to include tax and/or shipping in the refund?
- Do you want to email the customer to inform them that they got the store credit?
- And many more!
6. Once you are done, click the Refund $X.XX button. A pop-up will appear confirming the store credit was created.
That is it! Now you can close the Rise dashboard. If you chose to send an email, here is what it would look like:
Top 3+ Best Store Shopify Credit Apps
These Shopify store credit apps aim to simplify the issuing of store credit and reduce the potential for loss of revenue.
They also have features to create a loyalty program that encourages shoppers to shop more whenever they execute an action, such as:
- sign up,
- make their first purchase,
- meet a lifetime minimum spend,
Also, many of these store credit apps can be integrated with Shopify POS.
- Pricing: from $19.99/month (7-day free trial available)
- Rating: 4.8/5 (912 reviews)
This Shopify app helps launch a proactive loyalty program, increasing membership and customer lifetime value (LTV).
In addition, you can establish an advanced store credit system for your Shopify store to encourage referrals and reward customers.
Also, you can increase user retention by using bulk store credits for cashback, payment, etc.
- Build your own advanced store credit and gift card program
- Give store credit using automated rules and personalized recommendations
- Expand your marketing capabilities with bulk gift cards and discounts
- The store credit system is easy to customize according to your needs
- Pricing: from $15/month (7-day free trial available)
- Rating: 4.3/5 (95 reviews)
FreshCredit is a powerful Shopify store credit app. It is fully customizable, not just with text, color, shape, and size, but also with your customer’s name on all pop-ups.
You can also change their credit name at checkout. For example, it could be ‘Dave's Fantastic Two For One Credit’ this week and ‘Your Mom’s Favorite Credit’ next week.
The app is embedded in the Shopify admin, simplifying your workflow. And if you type quickly, it can be set up in less than a minute.
- Record all transactions and keep accurate balances for all your customers
- Fully customizable, including adding your customer’s name
- Bulk update your customers’ store credit with just a few clicks
- Pricing: from $20/month (7-day free trial available)
- Rating: 5.0/5 (10 reviews)
CreditsYard is a Shopify store credit app that helps you build brand loyalty and turn refunds into sales by keeping cash in your business.
The app achieves this by using Shopify store credit as a refund option. Therefore, you can quickly reimburse all or part of an order without hassle.
In addition, you can reward your customers with store credits for buying specific collections or products.
Also, the app has an option that allows your shoppers to buy store credit directly from your Shopify store.
- Add/subtract store credit easily
- Send email notifications to customers after adding or deducting their store credit
- Import and export customer credits (CSV)
- Have complete control over how your customers use their store credit: set expiration dates, deduct taxes, etc.
- Pricing: from $7/month (7-day free trial available)
- Rating: 4.0/5 (3 reviews)
This Shopify app helps you create, modify and delete customer store credits at any time. In addition, you can design and send email notifications to your customers when new store credit are issued.
Also, the installation process is seamless. And the app is automatically updated as your customer database grows, such as new customers or changes in email.
- Opt to receive SMS when customers are redirected to check out with store credit
- Upsell easily with email marketing
- Store credit can be used in conjunction with gift cards and coupon codes
- Fully integrated with the Shopify admin.
Store credit is not just another way for your customers to pay. You can use it to help increase sales and customer retention. Finding new, creative ways to implement a store credit system for your Shopify store can be hugely beneficial.
How will you use Shopify store credit to boost your online store’s bottom line? Feel free to share your plan with us in the comments section below.