Returns are one of the biggest hassles for Shopify stores. Not only do they represent lost sales, but they also require to you use your valuable time processing refunds. Many tech-savvy merchants get around these problems by offering store credit instead. Learn how to issue store credit on Shopify for your customers.
Can You Issue Store Credit on Shopify?
Store credit has been one of the most requested features for a long time. In 2024, Shopify started rolling out basic credit functionality for all accounts.
This system is still a work in progress, so it’s not as smooth as many merchants want yet. You have to handle much of the process manually. Shopify has big plans to add automated options, but things aren’t quite there yet.
Shopify’s new store credit system also has compatibility issues with some store apps, customizations, and themes, which may not integrate correctly.
How Do You Give Store Credit on Shopify?
There are three ways to offer credit to customers on Shopify. None of them require you to do any coding, making these options simple and accessible for all merchants.
Method 1: Shopify Store Credit
To try out the “official” store credit features on Shopify, the first thing you need to do is switch from classic customer accounts to new customer accounts. This lets you save user payment methods and balances.
Next, enable the store credit toggle in your checkout settings. Customers will see an option to apply credit balances to purchases alongside other payment methods. They have to be logged into their accounts when paying to use store credit.
Method 2: Gift Cards
The “classic” way to offer store credit is technically a workaround involving gift cards. This method is compatible with most Shopify store themes and apps.
Here’s how it works:
- In your Shopify admin, go to Products > Gift Cards.
- Select the “Create gift card” option.
- In the “Initial value” field, enter the gift card’s value. For returns, add the purchase price of the original item.
- In the “Customer” field, enter the client’s name, email address, and phone number.
- The “Internal note” field gives you space to create notes for recordkeeping, such as invoice numbers. The customer doesn’t see this section.
- Click save and “Send gift card” to send the completed card via email or SMS.
Customers can use their gift cards at checkout, either alone or in combination with other payment methods.
Method 3: Shopify Apps for loyalty programs and store credit
Some Shopify apps offer complete store credit functionality. This method is fast, easy, and comprehensive, but there is a monthly fee for this convenience. For e-commerce stores that process hundreds of sales a week, the automation features alone are probably worth it. Setting up these plug-and-play apps is a breeze.
Can You Fix the Refund Problem?
Store credit has advantages, but it’s better to work to avoid refunds in the first place. Fix the underlying issue. For example, your customers aren’t sure which clothing size they need.
Apps such as Kiwi Sizing help you create customized size recommendations for shoppers based on measurements and other factors. You can make customers happy every time they browse shoes, shirts, dresses, undergarments, and other types of clothing.
What Are the Benefits of Issuing Store Credit Instead of Refunds?
Refunds are so 2000s. In 2024, if you’re not working with store credit, you’re missing out on benefits for you and your customers.
Keep Revenue in Your Business
Refunds are lost revenue, pure and simple. Nearly 15% of all online sales end up as returns, more than the amount most states charge in taxes.
Worse, many shoppers abuse the refund system. Clothing retailers have noticed that users purposely order the same item in various sizes, keeping one and returning the others. For esample:
- The shopper isn’t sure if the M, L, or XL is the right fit.
- Your store offers free shipping for orders over $25.
- The user orders all three sizes, bringing the order total to $30.
- You pay shipping.
- When the order arrives, the person tries on size L, sees that it fits, and returns M and XL sizes.
Instead of a great $30 sale, you only made $10, and you paid for shipping. Now imagine if 50% of your customers used this hack.
With gift cards, you keep the $30 and just issue a voucher for future purchases. Plus, you can deduct shipping costs for orders that don’t qualify for free shipping after a return.
Build Customer Loyalty
Some shoppers make honest mistakes. Store credit can help you build a good relationship with them.
It’s a win-win situation. The customer gets what they want, and you keep them as a client.
Deliver a Better Experience
Store credit gives you the chance to correct negative impressions. When the person goes to use their credit in your store, you get a second chance to make a positive impression. Don’t underestimate the number of times this has led to returning customers.
Use Guarantees As an Incentive
It’s easier to offer generous guarantees if you know the funds are going to stay within your store. Many customers normally hesitate to buy big-ticket items like power tools or electronics online, but a “100% Satisfaction Guaranteed” policy can persuade them.
How Can You Issue Store Credit on Shopify for B2B?
B2B e-commerce stores need credit for a different reason: to let customers buy now and pay later. Shopify’s new store credit functionality supports this in limited ways, but the process means manually setting up, applying, and deducting amounts — in addition to keeping track of billing.
Shopify Plus does offer the full B2B experience (e.g. net-30 payment terms and deferred payments), but that tier costs $2,300 a month.
There’s a better solution for small and medium B2B businesses: app integrations. In this case, Wholesale Pricing Now lets you manage net payment terms, tiered discounts, and other B2B features automatically.
Find the Ideal Ways To Issue Store Credit on Shopify
Now you know how to issue store credit on Shopify. Your next step is to choose the right method for your website, customers, and business. At StayTuned Digital, we can help you analyze your needs. Contact us for help right away.