Magic Needles: How one Indian craft brand ditched discounts for smart store credit
Table of content
- About Magic Needles
- The challenge: When “Retention tactics” stop working
- The solution: Category-level credit that actually makes sense
- The results: Repeat purchases without the race to the bottom
- Working with the Koin team
Snapshot at a glance
Heavy discounting led to one-time purchases. Points programs felt untrustworthy. Shopify's native store credit lacked flexibility across varying product margins
Category-based store credit through Koin allowed Magic Needles to set different credit rates by collection, maintaining margins while rewarding customers generously
Customers return naturally without discount dependency. Margins protected during promotions. Retention improved with honest, flexible reward
About Magic Needles
Where traditional craft meets modern commerce
Magic Needles has been India’s go-to for knitting and crochet supplies since 2015. They have built something rare. A brand that connects Indian artisans with makers who care about quality, sustainability, and craft that actually lasts.
Their sub-brand, Hobby Store, makes premium supplies accessible without the premium attitude. It’s about empowerment as much as it is about yarn.
The challenge: When “Retention tactics” stop working
Kalpesh Patel knew store credit worked. He’d seen it drive repeat purchases better than almost anything else.
He previously used reward points. However, there was a problem with this approach.
“Points have been so overused that nobody trusts them anymore. Customers know they’re worth maybe a third of face value – if that.” - Kalpesh Patel
Store credit felt different. One store credit = one rupee. Simple. Honest.
When Shopify rolled out native store credit, Magic Needles jumped on it. Finally, a built-in solution. Except it wasn’t flexible enough.
Magic Needles sells everything from budget-friendly hooks to imported premium yarn. Margins vary wildly. A flat store credit rate across the board? That’s a fast track to bleeding money on low-margin products while undervaluing high-margin ones.
“You can’t treat every category the same. A blanket approach just doesn’t work when you’re actually trying to run a profitable business.”
The solution: Category-level credit that actually makes sense
“Being able to vary credit by collection means I can structure offers that work for the business and still feel generous to customers. And since they can spend it anywhere on the site, it doesn’t feel restrictive.”
They use store credit in two main ways now:
Rewarding their best customers. Not everyone, just the segment Kalpesh believes truly deserves it.
Replacing discounts during sales. Instead of slashing prices, they offer store credit. Price integrity stays intact. Future revenue gets locked in.
Kalpesh shares one of the most valuable outcomes: enabling a unified store credit experience across channels.
"Customers earn store credit whether they shop online or in-store, and can seamlessly redeem it on either platform - regardless of where it was originally earned. This created a true omnichannel loyalty experience and removed friction between our retail and digital journeys."
The results: Repeat purchases without the race to the bottom
With category-based store credit live, Magic Needles now:
Retains customers using rewards that feel real (because they are)
Runs promotions without torching margins or training customers to wait for discounts.
Tailors incentives that feel intentional, not generic
Keeps full control as their catalog and economics shift
Instead of chasing one-time sales with price cuts, they’re building a base of customers who come back, because it makes sense to.
Working with the Koin team
“The feature I needed didn’t exist initially. But instead of getting a “no”, I got a timeline. The team, especially Rita, delivered exactly what we needed, on schedule.”
“Rita never said something couldn’t be done. She’d say ‘let me work on it’ and then actually follow through. That’s rare.”
Magic Needles proves that retention doesn’t require racing to the bottom. With the right tools, you can reward generously, protect margins, and build a customer base that actually sticks around.
Ready to retain customers without sacrificing margins? With Koin, you can create flexible, category-based store credit programs that work for your business model, not against it.
Get value insights to grow your stores!
-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
