As an online or omnichannel retailer, you might be tricked into thinking that a return means the end of your brand’s relationship with that customer.
However, it is clear that just because someone proceeds with a return at some point, it doesn’t mean this has to affect your customer lifetime value. In fact, just like in any interpersonal relationship, having arguments and proactively handling them can make the entire connection stronger.
It’s a make it or break it kind of deal, so the ways you’ll be managing returns decide whether or not it’s going to be a fail or a long-term success for both your business and your customers.
Therefore, repeat after me:
- Returns are not my enemies.
- My customers love my products, just maybe not all of them.
- Online store credit will always bring them back for more.
You can make this your daily mantra if you want to.
Store Credit on Shopify: Why, What, and How?
First off, returns ≠ refunds. It’s super simple!
Once you realize that a return can bring so much more opportunities and that it doesn’t have to end with a refund, you’ll be able to achieve so much.
Besides, acquiring a new customer can cost five times more than retaining an existing one.
The point is to transform your returns into future opportunities.
And store credit is one surefire method to help you make an upselling machine out of your returns.
One great way to keep existing customers coming back for more is to share with them exclusive and even personalized offers, gift cards, or another type of virtual coupon to drive brand loyalty— including online store credit.
Whenever a customer asks for a refund or exchange, you can also provide online credit coupons to make up for the trouble or reimburse them instantly without having to wait for the bank transfer. By doing so, you reduce the pressure off your customer care team while improving the overall customer experience.
Discounts are one way to make the customer feel valued after requesting a return. Offering a discount encourages them to come back which in turn increases both sales volume as well as revenue generated per visit or purchase.
Although you’re already refunding their order or sending an exchange product, you can also provide them with a discount on their next order to make sure you have an advantage over your competition.
On the other hand, gift cards are a great way to make up for the inconvenience caused by the return. You can generate the gift card code and email it to your customers directly from Shopify.
Store Credit — The Better Alternative
In a perfect world, the customer would only request exchanges.
However, in real life, most times customers ask for a refund, and that can take a toll on your Shopify store. You should aim for a lower refund rate and try to compensate through online store credit whenever possible.
But what is the refund rate, and how to calculate yours?
The return rate refers to the total number of refunds versus the total number of returns.
Here’s an example:
For 1,000 returned units and 500 refunds, the refund rate would be 500 / 1,000 x 100 = 50%.
However, the better alternative to reimbursing the sum to the original payment method (e.g., bank account, credit card) is to offer instant store credit for online returns.
You have to think about your business and customers’ needs before making any decisions in eCommerce. There is no one-size-fits-all approach, so you need to be confident when considering which of the many reimbursement options available out there might work best with your specific goals but also which are the most convenient for your online and in-store shoppers.
If you’re selling in a brick-and-mortar shop as well, solutions like Shopify POS might help you earn your customers’ trust by initiating the refund in person and removing unnecessary steps. But for your Shopify online store, you need to be more creative.
As mentioned above, Shopify only allows you to issue a gift card or discount code by default.
This can be inconvenient for a number of reasons:
You don’t have as much control over the reimbursed amount (i.e., the discounts).
These options do not guarantee the customer will return to your shop.
They’re not strong enough incentives to encourage future purchases.
And the list goes on.
If you offer store credit instead of discount codes, you can set fixed amounts and provide additional credits to reward customers for your loyalty at the exact same time. This facilitates the process and reduces the time spent on support tickets, especially if you’re using automation tools like WeSupply.
But what about gift cards?
Gift Cards Vs. Store Credit Coupons
Shopify store owners know how important is to properly reward customers for their loyalty to the brand, and providing free gift cards directly from Shopify is an effective way of doing so.
To issue gift cards from your Shopify store admin section, you need to go to Products and then Gift cards. Click on the Issue gift card option and enter the necessary details manually. Next up, you also need to manually look up customers in the search box under Find or create a customer.
The issue is that these gift cards are normally email-based, and they can take time to be processed and sent out. In terms of loyalty programs, this works just fine. However, store credit is supposed to be issued almost instantaneously.
Providing store credit instantly removes any confusion or uncertainty that might come with waiting for the gift card emails to arrive in their inboxes and enables customers to use the remaining balance whenever they see fit.
WeSupply lets you automate the entire process and set custom return rules to make sure only legitimate returns are refunded. Besides, you can also enable the refund method using gift cards in WeSupply, depending on your needs at the time of setting up the return rule.
How To Issue Store Credit Coupons From WeSupply?
Unfortunately, there are many reasons why customers will return products. Sometimes items get damaged during shipping and need to be exchanged for another item. Other times customers receive a wrong product or an incorrect version of what was ordered by accident and want it changed or refunded.
Whatever happens – you need to take care of the situation quickly!
Luckily, WeSupply enables you to easily provide store credit coupons for your Shopify shop.
The instant store credit functionality allows merchants like yourself to turn refunding into future purchases.
Store credit step-by-step
There’s one thing for sure, and that’s the fact that customers love having options on how they spend their money.
By issuing instant coupons instead of reimbursing the money, you are able to keep your customers happy and process the return much faster than you would if they had to wait for a refund— process that could take up 2-3 weeks.
WeSupply makes it easy for you to issue instant coupons when customers choose returns so they can purchase another item from your store using their coupon credit.
You can also offer instant store credit as part of your customer loyalty program. This way, customers get what they want, whenever they want while still allowing them to save money by using coupons on future purchases!
The first step is to log into your WeSupply account. You can access Settings from there and then go to the Returns section.
Scroll down to the Instant Credit Processor, choose your service provider (e.g., Shopify), and click Save. This allows us to generate instant credit through your processor.
Next up, you’ll need to create a return logic that allows for an instant credit refund. When setting up the return logic, make sure you select Yes for Issue Instant Credit.
What’s the best part? You can also offer extra instant credit by adding the USD value in the Extra Instant Credit Amount USD section.
When you’re done, click Save. It’s that simple!
Read our article Instant Online Store Credit: Benefits and Best Practices to learn more about the benefits of store credit.
Partial refunds coming in handy
But there are times when the customers will go for reimbursement to the original method of payment, and there’s not much you can do about it. The best thing you can do, however, is to make sure the process goes smoothly for them and yourself.
No doubt, automating the return process is a fantastic way to save your customers and your support team precious time and energy. On the flip side, if you’re dealing with a ton of return requests every single day, this can come with a new set of challenges.
More specifically, there may be times when you won’t be able to refund the customer properly because you might not even know which items have been received back from the customer.
For instance, if a customer marks several items for return but only sends back to your warehouse some of them, it can be painful to keep track of what was received and how much money should the customer be refunded.
If that’s the case for your online store as well, you may want to consider refunding items separately as soon as you receive each and every one of them. WeSupply allows you to offer partial refunds depending on how many items you received back from the customer.
This will allow you to better organize your warehouse(s) and improve the entire returns management experience!
Learn here how to issue partial refunds in WeSupply to make your job easier and the customer experience entirely frictionless!
Last Thoughts On Store Credits For Shopify Brands
Store credit can do many things, and it’s more than just another payment option for retail customers— the benefits are clear. You’ll retain more of your customer base by giving them a reason to come back again, or even tell their friends about how great you were!
Store credit is a powerful way to increase spending and grow your Shopify store’s revenue. In fact, when you’re offering store credit, not only are your customers more likely to spend their money at the store in question but also increase spending on other items. This can be a major benefit for any business looking into ways they might grow revenue.
Taking advantage of automation tools will help you be more efficient when handling return requests, and using a self-service center may save time since your customers won’t need direct approval in most cases. Turning to automation software can simplify the process of issuing store credit instantly.
In this case, look for a Shopify app that works for you, not against you. WeSupply is the complete post-purchase automation solution, designed to help merchants like you elevate their businesses. From returns management to order tracking and delivery estimates, we’re here to lend you a helping hand!
If you want to learn more about Shopify returns and how to deal with them efficiently, check out our article How to Handle Shopify Returns: Everything You Need to Know.