Store credit is a powerful tool that offers numerous advantages for both merchants and customers. It provides a flexible and convenient payment method that can significantly enhance the shopping experience. In this article, we will explore five key benefits of store credit on Shopify and why it is worth considering for your online store.
What is store credit on Shopify?
Store credit is a value you can offer for your customers that they can use in their next purchase in your store. This value is approval up to a currency in your store and can be sent out on any occasions instead of returning the cash to the customer’s credit card.
Store credit is a great tool for customer engagement. The store can issue store credit as loyalty rewards, compensation, refunds, or in any other case the store sees fit. This article outlines many of the benefits of store credit when selling on Shopify.
For example, if I am selling in my store in US dollars, then I can decide to give out a 15$ reward for each purchase above 100$. The customer can then redeem their store credit at checkout. This way, I have rewarded them without ever cheapening my brand by using discounts.
If you’re just starting out, you can explore features like store credit and apps with the Shopify for 1 dollar trial.
5 benefits of store credit on Shopify
Returning customers
Customers are a huge asset to any store. Not only is the acquisition of a new customer up to 7 times more expensive than having a customer come back, but a satisfied returning customer is also more likely to be an advocate for your brand.
Bottom line, rewarding a customer with store credit incentivises them to come back and make their second, third, or tenth purchase at your store, knowing they have good reasons to do so.
Dollars are dollars
Now that we’ve agreed that giving your customers a good reason to come back is worthwhile, you may be wondering, “I can already reward them with points, so why choose store credit?” The answer lies in the many benefits of store credit, from encouraging repeat purchases and increasing customer loyalty to creating a more flexible and seamless shopping experience.
Just think of how you would treat an award that you can not see its direct value, whereas a reward that you understand right away. A thousand points can mean different things in different stores, but 15 dollars are always 15 dollars.
Studies show that when customers receive rewards that are not currency, they tend to treat it as free cash. And if they have free cash lying around, they probably do not want to use it.
Less friction – More conversion
Another benefit is using friction. Simply put, the less time your customers spend in the checkout, the greater the chance they finish the purchase process.
We want customers to make as few decisions as possible during checkout. Having them figure out whether they want to spend 50 points on a $5 discount or 100 points for free shipping substantially reduces their chances of making the purchase.
Having a one-click button that automatically applies to your store credit creates a seamless experience that reduces their time at checkout, and it increases the chances of completing the purchase.
Store credit is just the appetizer
Even if your customers initially return just to use the store credit you gave them, in most cases, they’ll end up spending much more. This is one of the key benefits of store credit—it not only encourages repeat purchases but also motivates customers to buy the products they truly love, whether their credit fully covers the cost or not. Just imagine the huge ROI this can generate for your business.
Gain more out of giving back
With store credit, refunds, and compensation can be an opportunity to increase revenue. How so?
Instead of returning the cash to the customers’ credit card, you can give them an amount to use at your store, then they will come back for a second, often larger purchase. That way ,you can manage to keep the money at your store instead of taking the whole amount out of your revenue.
Common questions about Shopify store credit
Can customers check their store credit balance on Shopify?
Yes, customers can typically check their store credit balance on Shopify. Merchants can provide customers with access to their store credit balance through their Shopify account. This can be done by displaying the available store credit balance on the customer’s account dashboard or by providing a specific page or section where customers can view their store credit balance.
Can store credit be combined with other payment methods?
One of the key benefits of store credit is its flexibility during checkout. In most cases, store credit can be combined with other payment methods on Shopify, allowing customers to apply their available balance toward a purchase. If the total order amount exceeds their store credit, they can simply use another payment method to pay the remaining balance, creating a smoother and more convenient shopping experience.
Can I transfer my store credit to someone else?
The transferability of store credit depends on the specific policies set by the merchant. Shopify itself does not provide a built-in feature for transferring store credit between customers. However, merchants can implement custom solutions or provide assistance on a case-by-case basis to accommodate customers who wish to transfer their store credit to someone else.
How does the process of applying store credit during checkout work?
One of the key benefits of store credit is how seamlessly it works during checkout on Shopify. Customers can easily apply their available store credit toward a purchase, either on its own or alongside other payment methods. The credited amount is automatically deducted from the total order value, allowing customers to see the updated total before completing their purchase for a smoother and more transparent shopping experience.
What happens to store credit if a customer returns a purchase?
When a customer returns a purchase, the merchant can typically choose to issue a refund in the form of store credit or a monetary refund. If the merchant opts to provide store credit, the refunded amount will be added to the customer’s store credit balance, allowing them to use it for future purchases within the store.
In conclusion
Above, we have shared the benefits of store credit and we’ve been talking about the tool that has a substantial impact on your store retention rate, reward claim, conversion rate, ROI, and revenue loss to operation.
Sounds like something that can help you, right? If you need any further assistance, you can reach us at the chat box at the bottom right corner of our website.
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