E-commerce tips

Shopify store credit: What it is and how to use it in your store

By

Emma

on

Feb 28, 2025

Introduction: Why Shopify store credit matters for your business

Successful eCommerce brands understand that acquiring a customer once isn't enough – the real growth comes from turning first-time buyers into repeat customers. Shopify store credit stands out as one of the most effective tools for driving this repeat business.

Store credits provide monetary value that customers can redeem on future purchases, creating a direct pathway back to your store.

In this guide, you'll learn:

  • What Shopify store credit is and how it differs from other options

  • Step-by-step methods to implement store credit in your shop

  • Advanced strategies to maximize the impact of your store credit program

Whether you're looking to improve your returns process, build a loyalty program, or simply increase customer lifetime value, this comprehensive guide will give you the practical knowledge to effectively implement store credit in your Shopify business.

1. What is Shopify store credit and how does it work?

1.1 Understanding Shopify store credit: Definition and basics

Store credit represents monetary value given to your customer to spend exclusively in your store. Unlike gift cards or discount codes, store credit is not transferable and is linked directly to the specific customer to whom it's issued, either with or without an expiration date.

Introduced by Shopify in June 2024 as an early access feature, store credit eliminates the need for workarounds like gift cards and discount codes that merchants previously used to offer credit to customers. It's now available to all Shopify businesses globally.

1.2 How to use Shopify store credit: Functionality and process

When you issue store credit, you're essentially creating a digital account balance for specific customers. Rather than returning funds to their credit card or original payment method, this balance becomes available in their customer profile.

This feature differs from discount codes or coupons because:

  • It's assigned to specific customer accounts

  • It has an actual dollar value (not just a percentage off)

  • It can be used across multiple purchases until depleted

  • It creates a direct incentive for customers to return to your store

The beauty of store credit lies in its flexibility - you can issue it for returns, as loyalty rewards, to resolve service issues, or as part of promotional campaigns. For your business, it means retaining value that might otherwise leave your shop entirely.

Store credit is particularly useful for:

  • Handling returns without losing the sale completely

  • Rewarding loyal customers

  • Resolving customer service issues

  • Building a loyalty program

1.3 Key benefits of implementing store credit in Shopify

Implementing store credit in your Shopify store offers several key advantages:

  1. Retention of revenue: Keeps funds within your business instead of losing them through refunds. Businesses using store credit retain up to 20% more revenue.

  2. Enhanced customer loyalty: Strengthens relationships and encourages repeat purchases. While repeat customers account for only 21% of customers, they generate 44% of revenue and 46% of orders.

  3. Improved customer acquisition costs: Acquiring new customers costs five times as much as retaining existing ones, making store credit a cost-effective strategy.

  4. Increased average order value: Customers often spend more than their credit amount. For example, if a customer has $20 in store credit, they're likely to spend more than $20 on their next purchase.

  5. Simplified returns process: Streamlines returns while maintaining customer satisfaction and reducing the volume of returns your team handles.

  6. Improved customer experience: No complex codes to remember—credit is automatically available at checkout when customers log in.

2. How to create a store credit system on Shopify

In the Shopify ecosystem, store credit functions through several mechanisms:

  1. Manual implementation: The simplest approach involves manually tracking store credit in customer notes or external systems, then applying it as a discount during checkout.

  2. Gift card system: Shopify's native gift card system can be repurposed to function as store credit by issuing gift cards to specific customers.

  3. Store credit apps: Dedicated third-party apps from the Shopify App Store offer comprehensive store credit functionality with features like automatic tracking and customer-facing balance displays.

  4. Shopify Scripts (Plus): Shopify Plus merchants can utilize Shopify Scripts to create customized store credit implementations that integrate directly with their checkout process.

  5. API integration: For the most customized solution, developers can leverage Shopify's API to build bespoke store credit systems tailored to specific business needs.

Each implementation method offers different levels of automation, customer visibility, and management capabilities – the right choice depends on your store's size, technical resources, and specific requirements.

3. How to add store credit on Shopify: Implementation methods

Shopify merchants can implement store credit in several ways, from simple manual tracking to sophisticated automated systems—each with distinct advantages depending on your store's size, technical resources, and business needs.

3.1 Manual store credit tracking in Shopify

For small stores just starting out, a manual approach to store credit may be sufficient:

How it works:

  • Keep a spreadsheet or document tracking customer names, email addresses, and their credit balances

  • When a customer with credit makes a purchase, manually apply a discount equal to their available credit

  • Update your tracking system after each redemption

Pros:

  • No additional software costs

  • Simple to implement with minimal setup

  • Complete control over the process

Cons:

  • Time-consuming and prone to human error

  • Lacks customer visibility into available credit

  • Becomes unmanageable as your store grows

3.2 Using Shopify's gift card system for store credit

Shopify's built-in gift card functionality can be repurposed to serve as a store credit system:

How it works:

  • Enable gift cards in your Shopify admin

  • Create and issue gift cards for the credit amount to specific customers

  • Customers can apply these codes during checkout like standard gift cards

Pros:

  • Utilizes Shopify's native functionality

  • Automatically tracks redemption and remaining balances

  • Customers can easily apply credit at checkout

Cons:

  • No distinction between gift cards and store credit in reporting

  • Limited customization options

  • May confuse customers who don't associate gift cards with store credit

Shopify gift card

3.3 How to issue store credit with dedicated Shopify apps

Specialized apps from the Shopify App Store provide comprehensive store credit management:

How it works:

  • Install a store credit app from the Shopify App Store

  • Configure the app according to your preferences

  • Issue and manage store credits directly through the app interface

Popular Shopify store credit apps include:

  • Store Credit & Gift Card Manager

  • Recharge Store Credit

  • Store Credits & Loyalty Points

  • Shopify Customer Credit

Pros:

  • Purpose-built for store credit management

  • Customer-facing credit balance displays

  • Automated credit application at checkout

  • Detailed reporting and analytics

Cons:

  • Monthly subscription costs

  • May require some technical setup

  • Feature sets vary between apps

Shopify store credit apps

3.4 Advanced options: Shopify POS store credit and Shopify Plus solutions

Larger merchants on Shopify Plus have additional options:

Shopify Flow store credit: Flow automation can be used to issue store credit automatically based on triggers like returns or specific customer actions.

Shopify Scripts: Plus merchants can create custom checkout scripts that handle complex store credit implementations.

API Integrations: Custom development with Shopify's API allows for bespoke store credit systems that perfectly match business requirements.

*Looking for implementation details? Check Shopify documents on store credit here.

4. Innovative ways to use Shopify store credit

Beyond basic refunds and returns, merchants are finding creative ways to leverage Shopify store credit:

4.1 Automated rewards programs with store credits

  • Configure your system to automatically award store credit based on purchase value (e.g., 10% of order total becomes store credit)

  • Use store credit as a loyalty currency that accumulates with each purchase

  • Create tiered rewards where higher-spending customers earn accelerated store credit

4.2 Customer acquisition strategies using store credit

  • Offer new customers a small store credit amount with their first purchase

  • Use referral programs that reward both the referrer and new customer with store credit

  • Create "win back" campaigns for inactive customers with surprise store credit deposits

4.4 How to give store credit for customer service recovery

  • Empower support agents to issue store credit to resolve service issues

  • Create standardized compensation tiers for different types of customer service issues

  • Use store credit as an alternative to discounts when resolving complaints

Conclusion: Maximizing your Shopify business with store credits

Shopify store credit represents a powerful tool for enhancing customer satisfaction while preserving revenue within your business. With Shopify's new native store credit feature released in July 2024, merchants now have more options than ever to implement this valuable customer loyalty tool.

By offering store credit as an alternative to traditional refunds or as a loyalty incentive, you create opportunities for repeat business while demonstrating flexibility and goodwill toward your customers. The data is clear – businesses using store credit see increased customer loyalty (up to 35% according to some reports), improved cash flow, and higher average order values.

Whether you choose Shopify's native store credit feature, leverage the gift card system, install a dedicated app, or develop a custom solution, implementing store credit can significantly impact your customer retention strategy and overall business success.

As you consider adding store credit to your Shopify store, remember that the most effective implementations balance business needs with customer experience. Clear policies, seamless redemption processes, and proper tracking are essential components of a successful store credit program.

Ready to implement store credit in your Shopify store? Start by assessing your current return and customer service processes to identify opportunities where store credit could enhance the customer experience while benefiting your business.

FAQs about Shopify store credit

1. Can customers combine store credit with other payment methods?

Yes, customers can typically use store credit alongside other payment methods to complete a purchase, covering any remaining balance not covered by their store credit.

2. Does store credit expire?

This depends on your policy. With Shopify's native store credit feature, you can set expiration dates or make credits valid indefinitely. Be sure to clearly communicate any expiration terms to your customers.

3. Can I issue store credit for partial refunds?

Absolutely. Many merchants use store credit for partial refunds while keeping the remainder of the original payment, especially in cases of partial returns or service recovery.

4. Is store credit taxable?

Generally, store credit itself is not taxable. However, when a customer uses store credit to make a purchase, normal taxes apply to the purchase as with any other transaction.

5. Can I track how much store credit has been issued and redeemed?

Yes. With Shopify's native store credit feature and dedicated store credit apps, you can view detailed reporting on issued and redeemed credit. The transaction history shows which orders contributed to credit amounts, providing valuable insights for monitoring the credit process.

6. How do customers know their store credit balance?

With Shopify's native store credit feature, customers can see their balance in their account dashboard. Many third-party apps also display the balance during checkout and send email notifications about available credit.

7. Can I offer bonus credit to encourage customers to choose store credit over refunds?

Yes, many merchants offer bonus amounts (e.g., 110% of the refund value) when customers choose store credit instead of a refund to their original payment method. This strategy has proven effective in increasing store credit acceptance rates.

emmac.jpeg

Emma C.

Developing content to help you understand, navigate.

Get value insights to grow your stores!

Your subscription could not be saved. Please try again.
Your subscription has been successful.

-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