Raising Loyalty And Increasing Returning Customers Flow With Store Credit & Refund

Recently, I’ve been googling and surfing the Internet, searching for the real customers opinion regarding any Store Credit activities. Here’s what I’ve found out (basing on live Yelp forum discussions and the Research Of Consumer Behaviour by Psychology Department of Golden Gate University):

  • about 70% of buyers appreciate and actively use their store credits;
  • remaining 30% don’t like it and prefer cash refunds (most of those shoppers experienced some kind of issue with store refund/refund/exchange).

So, is it worth implementing and using in your shop?


Let’s look at Store Credits and Refunds from two different point of views: Customer’s and Store’s.


Сustomer’s side

There are a few common cases with store credits, customers commonly describe:

Situation #1. Returned an item and received refund to store credit account. Doesn’t want to use credits anymore (any reason for non-using: want to receive cash back, don’t need to buy anything at this shop etc).

This case is the most common for store credit haters. Their arguments against are like the  following:

“I feel store’s hostage, because I need to add some credits to use the existing ones and buy something I don’t really need”.


“Stores can’t hold NO cash refunds policy, it’s illegal”.


This situation can be resolved by clear explicitation of your store Return & Refund Policy to all buyers, regardless their status on your shop (logged in/not logged in, registered users or just visitors). For example, you may give a short importante extract from Refund Policy on every product page. Shoppers will see this message and be aware of your position.

Regarding the second customer’s argument about legality of non-cash refunds, I’ve found the following answer from law.freeadvice.com:

“When stores do refund money, it is usually pursuant to a store policy that states explicitly that returns are extended, born out of the desire to create and keep good will in the community; but, this is a store policy and not a law.”

Furthermore, it’s always up to you, as a store owner, to decide whether implement cash refunds as an option, or not. Of course, cash back option will raise your shop reputation and trust! Consider this fact while establishing store’s business model.


Situation #2. Returned an item and received refund to store credit account. Didn’t know it’s a default refund option and wanted cash back.

This situation can only be resolved by clarifying the Return and Refund Policy while checkout or contacting a customer in person for checking order details, or even both. The more you communicate with your customers, the less issues you have!


Situation #3.Returned an item and received refund to store credit account. Can’t choose anything to buy for a long time to use Credits.

A kind of sad, but addressable case. You may always involve your Follow Up Email Marketing Tool and suggest personalized offers to this category of customers (usually, this segment is called Non-visitors/ Non-converters for XX days, for instance), based on their previous purchases.


Situation #4. Returned an item and received refund to store credit account.Satisfied and applied Store Credits for the next purchase.

This is probably the perfect situation for both: the customer and your store! And the most shoppers love store Credit option! That’s what they say:


“To me, once I spend money it’s almost as if it never existed so when I get the money back, it’s like bonus cash!” – says Melissa C. from Los Angeles, CA.

“Naw, if I buy something and don’t like it or whatever, store credit is fine. Either that or I toss it in the garage, I couldn’t be bothered.” – says Jim A. from Los Angeles, CA.


Store’s side

Let’s compare cash and store credit refunds:



Store Credits


Increase in returning customers

Most probably, YES, since every customer has own account with some credits ready to use for the next purchase every moment.  This is a high motivation factor for every shopper! MAYBE, since customer, who need cash back, could have had some issue with your store. But it’s up to your store team to turn such shoppers into returning ones. If they’ll be satisfied, they return for the next order.

Increase in number of orders

Most likely, YES, if store credits have an expiration date. This way your existing customers may want to make their next order until credits expire! NO, most likely, your customers will make purchases only in case they really need to. Not bad, even fair enough!

Customer engagement   rise

YES. Your customers will track their accounts and be aware of the credits expiration terms, since they don’t want to miss an opportunity to receive something interesting for ‘free’ (remember Melissa A. from LA? When she spends money and receives credit refunds, it’s like they never existed!). Probably, NO. Cash-backers are a kind of low-involving customers willing not to hear from your store a lot.

Preventing fraud returns

YES! Credits refund policy helps to avoid fraud returns! For example, customer ordered flat TV, used it for a week or two and returned. Or even worse: customer said, the package lost while delivery and asks for cash back. All these situation fall down with Credits: fraudsters don’t need them, they need some cash! Some fraudsters can use your store Refund Policy and your will to raise trust to your store!

Mirasvit has an outstanding solution for handling refunds and implementing store credits in your store: Store Credit & Refund extension!


Take a look at 5 prominent advantages you gain with Store Credit & Refund:


Advantage #1. Transparent and fast refunds process.

Transactions backendImage 1. Transactions backend.


View All customer’s transactions at a glance! With Store Credit & Refund your store support and service team members will be able to see each customer balance and provide them with quality support regarding refund.


Advantage #2. Clear store credits history for every customer.

Customer Store Credit Account HistoryImage 2. Customer Store Credit Account History.


Your customers can view all credits history right in their account! No hidden transactions or activities with their credits – everything is transparent and clear!


Advantage #3. Customers may refill their store credit balance and give some credits to a friend.

Managing store creditsImage 3. Managing store credits.


Cool feature, if a customer wants to give some present to a friend, but doesn’t know which exactly: simply refill credits balance and send them to a friend with the best wishes!


Advantage #4. Easy application of store credits from customer balance.

Spend credits easilyImage 4. Spend credits easily!


It’s so easy to spend store credits while checkout! The full amount of credits will be debited at once. Therefore, the Total of the current cart will be reduced (including all taxes and shipping fees).


Advantage #5. Add credits to customer account manually from the backend.

Adding Promo Bonus to customer’s accountImage 5. Adding Promo Bonus to customer’s account


Extremely useful feature, in case you need to:

  • appreciate a customer and present him/her some bonus;
  • refill someone’s balance (customer’s unable to make it him/herself);
  • give a customer personalized promotional (or apologizing) bonus, etc.


Knowing your customer’s needs is the key to success! As abovementioned situations showed, it’s almost always about the buyers’ comprehension of your store Policies and, of course, realizing their right profiling.

At conclusion grab some practical hints how manage customers returns and refunds, if you want to gain extra reputation points for your store and raise customer loyalty:

  1. Always place yourself to your customer’s side and review each situation thoughtfully.
  2. Inform your customers about your Return & Refund Policy BEFORE their purchases or while the order process.
  3. Provide customers with plain, short and relevant message from Policy on each key step or ‘hot point’ of your store.
  4. Apply Fraud Detection + Store Credits & Refund solution duo to avoid fraud orders and returns.
  5. Appreciate your customers with some promotional credits to engage them to your store activities and increase orders number.
  6. Empower your support and service team members with the authority to give some bonuses for credit refunds instead of cash backs to increase returning visitors flow.
Oleksandr Drok

Head of Products at Mirasvit

Alex serves as the Head of Products at Mirasvit, where he formulates the vision for Mirasvit's extensions, carefully curates new features, and constructs the roadmap.

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