Store credit is a settlement method between the shop and customers to facilitate purchases or refunds. It is a type of customer engagement tool which increases customer loyalty.
There are many reasons to use store credit. Consider the most popular cases below.
The customer wants to refund some items, so the store offers to put the refund amount as store credit instead of refunding the money to the customer. And next time, the customer can use it to purchase other goods. In this case, store credit is a good way to improve customer retention because the customer will come back to the store.
On daily sales processes, there may be technical failures and employees’ mistakes such a wrong item price, discount amount, etc. In such cases, it is a lot easier to patch up that mistake by store credit. The cashier can put the amount mistaken as store credit or print store credit slip and give it to the customer for use on next purchase.
The shop can use store credit as deposit payment. A regular customer can prepay a certain amount of money couple times a month and later use it to buy goods without prior payment. It is convenient for both the store and the customer.
Also, store credit can work like a gift card or bonus points. Sometimes store credit is compared with account sale.
We are a resale store and we issue store credit to our customers for items that they trade to us. If someone returns items they don't get a refund, but they get a store credit for the item they are returning.