Store Credit vs. Gift Cards: Explaining the Differences

Time to read: 5 minutes

There are quite a few differences between store credit and gift cards, but one thing is sure—both are effective discount methods. However, they excel in different areas. In this article, we look into both methods and discuss gift cards vs. store credit as tools in e-commerce stores. We invite you to read on.

Store Credit vs. Gift Card: Basic Info

Let’s begin with the most basic information about store credit and gift cards—their definitions. Here’s the deal:

Store Credit

Store credit is nothing other than a type of currency that can be used only in a specific store. It’s most commonly used for:

product returns,
product exchanges,
customer loyalty programs.

Store credit can be time-restricted (meaning that it will expire after a certain period) and apply only to a selection of your products, depending on the regulations in your store. It’s non-transferable, meaning that customers usually cannot purchase store credit for other users (e.g., as a gift).

Gift Cards

Gift cards are a product of its own. They are a type of pre-paid card that the user can typically purchase in a store to give to another person. As such, they are mostly used for:

presents (from customer to customer),
marketing campaigns (where you distribute gift cards to encourage customers to buy from your store),
customer loyalty programs.

The main difference between gift cards and store credit is that the former is legally regulated. Legally, they are considered a payment method, which means that you cannot apply any internal rules regarding how they can be used in your store (e.g., by limiting the range of products that can be purchased with such cards).

The Main Differences Between Store Credit and Gift Cards

Having introduced both store credit and gift cards, let’s look at the main differences between these two. Take a look at the table below.

Store Credit vs. Gift Cards
	Store Credit	Gift Cards
Purpose	Typically used for refunds. May also be utilized as a part of loyalty programs or to market your store.	Typically used as gifts to other people. May also be utilized as a part of loyalty programs or to market your store.
Regulations	You can regulate the use of store credit with your own rules.	Legally treated as a payment method—you cannot limit the extent to which they are used in your store.
Final user	The user to whom the credit store was applied in your store.	Anyone holding the gift card.
Pros	Simplifying refund management,reducing revenue loss,building customer loyalty.	Increasing brand awareness,boosting convenience for the customers,elevating order values.
Cons	Limited use,tracking complexities.	Difficult to manage,require legal compliance.

Can You Use Both?

Yes, you can utilize both shop credit and gift cards—it’s actually a good strategy. Since each of these methods serves a slightly different purpose in e-commerce stores and has its own benefits, you can apply store credit for refunds while still offering gift cards in your store or as a part of your marketing campaigns.

There is just one “but” in this case. To combine them, you need to use solutions that enable such integrations. Some platforms (like Shopify) do not enable that, so while you can sell gift cards and grant store credit in your store, customers won’t be able to use both of these for the same transaction.

FreshCredit—ByteStand’s Solution for Your E-Commerce Store

At ByteStand we offer you FreshCredit—a hassle-free store credit solution. It enables you to implement store credit into your e-commerce platform quickly and makes it convenient for your customers since it does not require them to enter any promo codes.

To add to that, FreshCredit comes with automation features that make store credit management much easier (and quicker) for you. From importing/exporting customer credit data to automated SMS/email notifications—you can set everything up and drive customer satisfaction through a convenient refund option.

Can multiple discounts be used with store credit? Our solution is designed for Shopify, so it comes with all the limitations of that platform. This, unfortunately, means that you cannot combine FreshCredit with other discounts in the same transaction.

The Takeaway

The differences between store credit and gift cards go down mainly to their intended purpose, final user, and legal considerations. In the end, it’s good to utilize them both in your business for maximum effectiveness. Nevertheless, you need to be careful when doing that—since platforms like Shopify do not enable you to use more than one type of discount per transaction, you need to find the right balance between store credit and gift cards. After all, your customers might feel frustrated when they have both and won’t be able to use them.

Did you like this article? Then you should also read: How to Offer Store Credit on Your Shopify Store

About the author

ByteStand

is powed by savvy Amazon industry vets who have been passionate about eCommerce for a decade each. We’ve worked with over 2,600+ brands, generating hundreds of millions of orders shipped through Amazon FBA/MCF program using the ByteStand app.