Store credit is a value being offered to your customers for every purchase they make in the future. In terms of advantages, store credits could increase size orders as well as promoting repeat customers.
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1. Common types of store credit
- Gift cards
Gift cards could be used as a means of holding store credit and/or loyalty rewards. Some people also purchase gift cards for their close ones as a present; therefore, a gift card is the most utilizing form of store credit for your business in most cases.
- Returns and exchanges
Another popular use of store credits is for cases of returns and exchanges, in which store credits will be used to compensate for customers. They could use store credits for exchanging products or to purchase new products in the future.
- Store credit cards, layaway, financing
When using store credit as a payment method, it could either be later or incrementally payment. Also, store credit cards could be used as a form of customer loyalty program.
2. The benefit of store credit to your business
- Creating repeat customer and boosting customer loyalty
Store credit offers customers an additional incentive to come back and have another experience. Also, it allows customers to show their satisfaction toward your business by becoming your repeat customers.
- Creating an incentive for customers to spend more
A market research conducted by GE Capital showed that retailer-branded credit cards could lead to a 29% increase in the number of customers paying actual visits to a store. Also, as shoppers having gift cards tend to spend past their store credits, this means higher sales.
- Preventing loss profit due to returns
While it is a fact that every seller is thriving for providing their customers best service and products, it is also undeniable that returns could have a heavy impact on their revenue. When it comes to this bind, store credit might be a great solution as customers would tend to use store credit for future exchange, thus preventing loss for businesses.
On the other hand, it is suggested that you should expand their exchange and returns policies so that customers could find it more comfortable to have another shopping experience with you.
