Store credit is a special currency that a specific retailer or merchant gives to their customers. Instead of using cash or credit cards, customers can use this store credit to buy products or services from those merchants and retailers.
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Shopify store credit: The ultimate playbook for merchants in 2025
By
Emma
on
Jun 17, 2025
Shopify store credit is a feature that was launched by Shopify back in 2024 due to high demand from merchants all around the world. Instead of losing customers forever when they want returns, smart merchants and retailers are now using store credit to keep that money in their ecosystem and guarantee repeat purchases.
However, the potential of store credit goes beyond simply being a tool for retaining revenue. That's why our team at Koin has created Shopify Store Credit 101: Innovate with Confidence for new merchants and retailers who want to apply this feature to their store.
In this article, we will have a glimpse of what will be covered in this playbook, including the definition of store credit, how store credit is better compared to other payment methods, and store credit use cases.
The definition of store credit
How store credit is better compared to other payment methods
Store credit offers a unique advantage that other payment methods can’t match. In this table, we will look at how store credit is more superior when standing next to familiar methods like gift cards, discounts, cash refunds, and loyalty points.
Store credit | Gift cards | Discounts | Cash refunds | Loyalty points | |
|---|---|---|---|---|---|
Revenue impact | Retain revenue in your business from cash refunds or additional costs | Immediate revenue boost as a liability | Increase sales volume in exchange for reducing profit margins | Money leaves your business completely | No clear impact, although there is evidence that it can lower profit margin |
Customer sentiment | Create a sense of account value and ownership | Afraid of fraud and scams | Instant savings on costs, but reduce perceived value toward the brands | Regain financial flexibility, though the process does take some time | Impatient since it takes time to accumulate enough points to get rewards |
Purpose | Store currencies for future purchases, retaining revenue within the business | Prepaid store cards for gifts | Reduce price for short-term sales boost | Give back customers’ money for returns and cancellations | Encourage repeat purchases with a ranking system |
Store credit in action: Use cases and benefits for Shopify merchants and retailers
Now that you know some of the basics of store credit, we will show you how to start using store credit. While there are many store credit practices, here are two of the most common strategies:
Store credit: a better alternative to refunds
One of the most common ways store credit can be used is to retain the value of your sale and your customers. If customers want to return or cancel a purchase, you can offer them store credit instead of cash refunds. This tactic brings out multiple benefits:
Maintaining revenue: Instead of returning the cash, you offer them a thoughtful solution that shows your sincerity, remorse, and commitment to make things right, which is much more valuable than a mere transaction. At the same time, you keep the revenue where it is.
Saving cost: According to Shopify, the cost to process a return can be anywhere from 20% to 65% of the item's original value when you factor in shipping, restocking, and loss of value. With store credit, imagine how much you can save without having to process too many return requests.
Creating a good customer impression: By offering store credit, you also show your customers that you value them and want to make sure they’re happy with your products and services. Especially when 67% of customers say that they would avoid buying from a business in the future after a negative return experience.
Avoiding refund-processing hassle: For credit card transactions, merchants will have to pay a flat rate or a percentage fee to process refunds for customers, which eventually decreases revenue. On the customer side, a refund may take up to 14 working days, depending on their card issuers, to go back into their account, limiting their access to those funds in the meantime.
Store credit as a reward program
Store credit is a great way to reward customers for performing certain actions. For instance:
Referral rewards: You will reward your customers an amount of store credits whenever customers refer someone to buy from your store. For example, Julep offers a $15 credit to its customers for every referral they make.
Email subscribers: If you are building your customer email list, consider rewarding subscribers with store credits to encourage sign-ups. According to a report, email campaigns featuring a fixed monetary incentive experience a significantly higher sign-up rate compared to a percentage discount. Therefore, a line that says: “20$ store credit when you sign up” will help you attract new subscribers and give them a push to try what you have to offer.
Review incentives: You can also use store credits to exchange credentials for your Shopify stores. This is a great way to engage with customers post-purchase, while making sure customers are fully satisfied with your products and services. Plus, you can quickly identify and address any dissatisfaction before it escalates.
A Shopify-certified guideline for beginners on using store credit
As a newly-released feature, the Shopify store credit feature can be overwhelming to navigate for those who are not familiar. That’s why we have put together all the fundamentals in Shopify Store Credit 101: Innovate with Confidence.
The playbook will cover everything in this article, plus exclusive insights from our store credit webinar with Shopify on how merchants and retailers can use store credit effectively to process refunds, exchanges, and rewards. We will also dive into the future trend of store credit and how you can take advantage of store credit for your promotional campaigns.
Final thoughts
Although it just rolled out last year, the Shopify store credit feature is becoming an effective tool for forward-thinking merchants to discover creative strategies that set them apart from competitors. While store credit was initially designed as a revenue-retention tool, many merchants are now using store credit to improve the customer experience by offering referral rewards, review incentives, and various other creative strategies.
Ready to take your store to the next level with store credit? Get your playbook now!
-About Author
Emma C.
As the Chief Marketing Officer at KOIN app, I’m here to build a robust ecosystem by collaping with Shopify apps. Together, we can create seamless integrations that add more value to our shared customers.
KOIN helps merchants retain customers, increase repeat purchases, and drive loyalty by offering cashback and store credit rewards.
📩 Let’s connect! emma@getkoin.io
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