Aside from being just a payment option for retail customers, store credit also boosts retention and motivates loyalty to your brand. Putting value to their every purchase they make with you puts additional reasons for them to come back and transact once more.
Indeed it is a very beneficial strategy for brands. Also, giving the customers more option in purchasing often gives them a good impression with your brand thus leading them to become fonder of it. Giving you more revenues every time they buy some more.
Here are some of the common ways how store credits are being used:
Returns and exchanges
When customers return or exchange merchandise, store credit is often offered in addition to or an alternative instead of a full refund. Offering store credit is one way you can avoid losing revenue to returns and help turn those transactions into exchanges instead. Through this you can also provide them with greater deals which can make them disregard refunds and maintain their transaction to your brand giving you a steady flow of income.
Store credit enables you to expand your return policy to a longer timeframe or accept returns without a receipt — making your policy more customer-friendly. This also ensures more money stays within the business, helping ease the burden of returns on your bottom line.
Store credit cards
Store credit can be issued every time a retailer extends credit and allows customers to pay at a later date. This is a good strategy because it gives a feeling to your customers that you trust them so they will trust you in return. Also, because they find convenience and efficiency with you, that’s what will make them stick with your business.
Gift cards
When a customer buys a gift card, they essentially are purchasing store credit to give to someone else. Gift cards also often are used to hold store credit from returns or loyalty rewards.
Loyalty rewards
It is true that store credit is an effective way for retailers to boost customer retention and loyalty.
In fact, experts say that “The more you’re tied to a brand, the more likely you are to be a brand advocate.”
This means, store credit offers customers an additional incentive (on top of great products and A-plus customer experience) to come back to your shop instead of looking elsewhere. As one facet of a robust customer loyalty program, store credit gives you yet another tool to showcase to customers what their repeated business means to you and it turns out one of the most common rewards customers earn through loyalty programs is store credit toward a future purchase.
Most importantly, store credits encourage customers to spend more
In fact, Customers would feel a lot better about spending more when stores offer a reasonable return policy. So, if you use store credit to allow for more flexible returns, you’re helping customers feel comfortable spending with you.
Also, offering them gift cards and loyalty rewards increases excitement to save and earn credit which will happen only when they spend. This motivation creates a mindset which is more focused on the credit being earned instead of how much is being spent.