What is Store Credit?

Store credit is a form of refund that customers can use towards future purchases at a specific store, instead of receiving a cash refund for a return or exchange.

Offering store credit to customers is a great way to encourage repeat business and customer loyalty. 

It’s important to know what store credit is, why it’s a good idea to offer it and even incentivize it, and how ReturnGO can help offer store credit as part of the return policy.

What is Store Credit?

Store credit is a form of compensation and a payment method offered to customers during the refund process in the event of a return or exchange. It represents a credit balance that can be used to purchase products or services from the same store, similar to gift cards.

Typically, store credit is issued instead of a full cash refund as one of the credit options available. This credit can later be utilized by the customer to make purchases, effectively acting as a store-specific credit balance. Unlike credit cards, store credit is tied to a particular retailer and cannot be used elsewhere, providing a convenient way for businesses to retain customers and encourage future transactions within their establishment.

Why is Store Credit Better Than a Refund?

Store credit is better than a refund because it encourages repeat business, reduces refund rates, and retains customers.

Encourage repeat business: Store credit encourages repeat business by giving customers an incentive to return to the store and make additional purchases.

Reduce refund rates: Store credit reduces refund rates by providing customers with an alternative to a full cash refund.

Retain customers: Store credit retains customers by building trust and creating a positive customer relationship.

How to Offer Store Credit

Offering store credit is a simple process that can be integrated into an existing return policy.

While store credit can be offered and tracked manually, the easiest way to manage store credit is by using a Returns Management System (RMS) such as ReturnGO to automate the process. 

With ReturnGO, the system automatically issues store credit to the customer’s account once the return is processed.

Make sure customers are aware of the store credit policy. Include information about store credit in the return policy, on the website, or in other communications with customers to ensure that customers know about the option to receive store credit and understand how to use it.

Incentivizing Store Credit

Incentivize customers to choose store credit instead of a standard refund by offering an additional amount of credit, special discounts, or promotions.

For example, if customers return an item because it is damaged or defective, refund them an additional 10% store credit.

Incentivizing customers to choose store credit over a refund keeps them engaged with the store instead of taking a refund and going to another store.

Use Store Credit to Retain Customers

Store credit can help retain customers by providing a positive customer experience and encouraging repeat business. When customers receive store credit, they are more likely to return to the store to use it, which can increase customer loyalty and repeat business.

Offering store credit shows customers that the store values their business and is willing to make an effort to keep them as a customer. This can help build trust and establish a positive relationship with customers.

When customers use store credit, they are more likely to purchase additional items beyond what the store credit covers. This can increase the average lifetime value and bring in more revenue. 

The positive experience of using store credit can then encourage customers to return to your online store in the future and continue shopping from there.

Include Store Credit in the Return Policy

Store credit is a valuable tool for increasing customer loyalty, reducing returns, and increasing revenue. 

ReturnGO enables stores to offer store credit as part of the return policy, making it easy for customers to initiate returns and for the returns team to process them. 

Incentivizing store credit encourages customers to choose store credit over a standard refund and helps reduce refund rates.


What is considered a return?

Shopify Returns

Returns vs. exchange

Product Returns Factors

Returns Best Practices

Returns Metrics