While all shop owners hope that everything a customer purchases will end up being a hit, unfortunately, this is not always the case. Customers often do return items, whether it is due to wrong fit, duplication, or simply realizing that the item was something they no longer wanted or needed. If this occurs, the shop owner will have two options, refund the customer the amount they paid, or issue a store credit for the value of the returned item.
While refunding a client's money after returns is as simple as clicking a button on the Shopify platform, store credit has a few more limitations on the site. Since many store owners may want to use store credit to help keep the money from the original purchase as sales dollars or to avoid refund fees for credit card transactions, they don't have to change their policy just because they use the Shopify platform.
We have found two solutions that can help Shopify users be able to issue store credit to their customers instead of issuing refunds for returned merchandise.
Create a Store Credit in POS App for IPad
If your customer is returning an item and using the store credit to purchase additional items right away, the best option would be to use the POS app on your IPad to create the store credit. If you choose this option and the customer is not using the credit right away, you will have to maintain a record of the store credit as it will not show on the client's account. To create the store credit, you will need to:
- Make sure you have store credits enabled on your payments setting screen
- Go to the order screen and tap open the customer's order
- Tap refund
- Using the plus and minus signs next to each product, indicate the quantity of the product that is being returned
- If the item needs to return to stock, you will need to enable the restock option
- Select the store credit option
- Tap refund
- Verify the amount of the store credit and tap refund again
- Tap Done
- Create an order for the new items the customer wants then hit total
- When you reach the select payment screen, choose store credit and enter the amount that was credited to the customer
- Any additional balance owing can then be paid with another payment option
Issue the Store Credit Through Gift Cards
If your customer is not planning to use their credit right away, the better option might be to issue them a gift card for their store credit to be used at a different date. When you receive a returned item, you can run a gift card through the system and give it to the customer as their store credit refund. This way you will be able to track when it is used and how much is remaining on the card. It is advised that you add an order number in the notes, so you know that it is store credit instead of an actual gift card purchase. While this may seem like an easy option, there are some issues with it that may make it a less than ideal.
- The gift card will count as revenue even though it was a refund for an item
- The gift card option is only available on the Advanced Plan that costs $79/month
- You will have to manually reenter the item into inventory
While issuing store credit through your Shopify Ecommerce store is possible, each option poses issues that you will need to account for to ensure that your reporting and records stay correct and the information is recorded accurately.