HOW TO SELL MORE WITH STORE CREDIT?
Every ecommerce business has different goals which tend to evolve or change gradually with time. However, there are some goals that always remain consistent for all ecommerce retailers and that is ensuring a seamless, personalised and enjoyable shopping experience for customers which ultimately leads to fulfillment of other goals such as customer retention, brand loyalty and increased conversion.
Now, there are countless tactics to improve customer experience and reach a variety of other associated goals. Store credit remains one of the most underutilised amongst them.
Store credit is more than just a buzzword – it is more than just another payment method for online shoppers. When implemented strategically with the assistance of an experienced Magento specialist, store credit serves as an effective way to increase a store’s revenue.
Now let’s take a step back and look at what exactly store credit means before we dig into some innovative ways to use the practice to increase customer retention in your online store.
What is store credit?
Store credit is a value offered by retailers to customers which can be used toward any purchase with their business. Unlike limited-time promotional discounts or sale offers, this type of credit doesn’t come with a validity and can’t also be transferred to any other account.
Retailers can use store credit in a variety of forms including:
- Return and Exchange: This is the most common type of store credit offered in addition to or in place of a refund when customer requests a return or exchange.
- Gift Card: Often purchased by customers to give to loved ones, gift cards are typically store credit that can be redeemed by the receiver toward a purchase or can also be used to hold credit from returns or loyalty rewards.
- Financing, store credit cards and layaway: This store credit is offered by a retailer to allows a customer to pay for their purchase at a later date or incrementally.
- Loyalty Rewards: These are store credit customers earn though loyalty programs which can be used toward a future purchase.
How does store credit benefit your business?
Long-Term Customer Retention
Store credit is used by many of the world’s most successful ecommerce retailers to inspire customer retention and loyalty. When a customer purchases a great product from your store and have a seamless shopping experience, store credit can be a cherry on the cake.
Not only does it encourage customers to come back to your store instead of going elsewhere for future purchases, but it also allows you to showcase customer what their repeat purchase means to your business and give you yet another opportunity to serve them in the best way.
Reduce Revenue Lost to Returns
Even after putting best efforts into practice, online stores may experience returns and exchanges for some reasons which means a lot of lost revenue. Offering store credit is one way to turn returns into profitable exchanges and prevent potential revenue loss associated with those returns.
Store credit allows you to accept returns without a receipt or expand the timeframe for returns, which contributes to a customer-friendly experience. This will also ensure return purchases, which will eventually allow more money to stay within the business.
Induce Customers to Spend More
It may sound difficult, but store credit is often used to encourage customers to spend more. A study conducted on store credit found out that store credit leads to more frequent store visits. Customers who shop using gift cards often tend to spend more than their store credit, which results in higher sales for the retailer.
Effective ways to implement store credit on your website
Use Store Credit as Charitable Contribution
A study by Forbes revealed that more than 66% of consumers are willing to spend more with socially responsible retailers.
Donating store credits or gifts cards to charities or causes you and your customers support is a great idea to improve your business integrity and reputation without directly impacting revenue.
Expand Your Return Policy
Retailers lose billions of revenue to returns annually. That said, it is inevitable to have a robust return policy in place, preferably the type that includes store credit. Not only does store credit add leniency and flexibility to your returns, but it also allows you to capitalise on your increased sales. With store credits, you can increase return timeframe, allowing customers to be more flexible with receipts and tags, which eventually contributes to a great customer experience.
Store Credit for Referrals
Loyalty programs are a common practice amongst retailers to incentivise valuable customers. Smart retailers take this practice to the next level by setting up referral programs for customers.
This can be done by incentivising word of mouth and offering store credit to customers who refer your brand or products to others.
To sum up
Store credit offers several opportunities for retailers to boost return purchases, customer retention and overall revenue. It is advised to hire a Magento specialist to integrate an effective store credit program into your ecommerce website to turn your returns to your advantage and keep maximum revenue within your business.