Up until recently, the only option to provide a Shopify store credit was through the use of discount codes. Discount codes are super simple to set up and definitely have their place in the flow of your online store.
A discount code is like a passkey offered to customers to reduce the price of an order. The customer enters the discount code at checkout and the discount is automatically applied. With Shopify, you can offer fixed value, percentage, or shipping discounts in your store. You can set an expiration date on the code, a minimum order amount, and the number of times the code can be used.
However, when offering store credit on Shopify with discount codes, there are quite a few unappetizing downsides:
- There’s no way for shoppers to maintain a balance. If you give a shopper $50 off through a discount code but they only want to use $20 today, they lose the remaining balance on their discount code.
- Basic discount codes can only be used once. After that the code expires and the customer is no longer able to use it.
- Multiple use discount codes can cause even bigger problems. If you offer a multiple use discount code for $50, the shopper could receive a $50 credit on every order they place. So your $50 store credit could blow up into $500 or more worth of store credit.
- With discount codes the user has to enter in a typically long random code and there is no stored value, its just a percent or dollar amount off.
What about gift cards? Gift cards are another form of payment that can be used for store credit and redeemed on your store. Once you load the store credit money onto the gift card, the customer will receive an email with a link to redeem it at a time of their choosing. This ensures the customer will return to your store to spend that money, but there are a couple of issues with gift cards:
- Gift cards are typically only available on Shopify’s Advanced Plan ($79/month). This has been temporarily suspended due to COVID-19, but could go back into place any day.
- Gift card purchases are counted as revenue even though they’re actually refunds. That could create a nightmare for your accounting.
Gift cards are a better option than discount codes, but they still pose issues that you’ll need to account for. Learn more about how to offer a Shopify store credit.