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Make Refunds Efficient With Magento 2 Store Credit Feature

Updated on December 23, 2021

6 Min Read
Magento 2 Store Credit

Store owners are wary of returns simply because it is not good for the business. 

Returns cost the business in terms of refunds, replacements, restocking costs and shipping fees. Additional niche-specific overhead charges further inflate the costs of the returns. According to Statista, the US ecommerce industry would spend $550 billion on returns by 2020, an almost 75.2 percent increase from last four years’ combined. 

According to many experts, Magento 2 store credits are a great way of dealing with store refunds and minimize the expenses associated with returns. 

Let’s see what this Magento 2 store credit feature is all about and how you as a Magento store owner can benefit from it. 

What is Magento 2 Store Credit?

Store credit is a value that you offer to the customers for any purchase they make through your online store and now wish to return. Usually, this credit isn’t transferable to other shops or brands, and (usually) doesn’t have an expiration date. You can only offer store credit if the ecommerce platform you use offers the feature to add store credit to the customer’s account. If this is not a default functionality, you can use an extension such as the Magento 2 store credit extension.

Store credit (more importantly, Magento 2 store credit)  can be issued for the following reasons: 

  • Returns and exchanges: When customers demand Magento refunds of the products, store owners can offer Magento 2 store credit instead of cash.
  • Gift cards: When customers buy a gift card, they essentially purchase the store credit for themselves or present to someone else. 
  • Promotional credits: When clients buy products and earn Magento store credit toward a future purchase. 

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When to Offer Magento 2 Store Credit?

By and large, the Magento store credit feature is beneficial for both customers and business owners. They are a great way to build efficient relationships with customers and keep sales growing. Implementing Magento store credit features at your online store can simplify your returns & exchanges and satisfy your customers. 

However, Magento 2 store credit implementation can take a lot of time and effort. To help out store owners easily offer Magento refunds, several developers have created refund specific extensions. Out of the available options, Magento 2 Store Credit Extension is a popular choice. 

Businesses can use the Magento 2 store credit extension in several scenarios such as: 

  • Products Fail to Match Expectations

 If the description of the merchandise is incorrect, returns become inevitable. This can be avoided by uploading accurate and detailed product description so that clients understand exactly they are purchasing. Also, don’t forget to use high-quality images and highlight Magento store credit policy for the returns.

  • Delivering Wrong Products

 Researchers have found out that 50 percent of customers return products due to supplier error. The accuracy of the product-shipping process is a factor in decreasing store returns. Thus, automating the process and using custom-developed logistics tools are essential to ensure that customers are receiving the right products. 

  • Customers Don’t Need the Purchased Items Anymore

In some cases, the customers realize that they no longer require the purchased items. To avoid this, highlight the advantages and distinguishing capabilities of the items so to convince the customers that they have made the right choice. In addition, offer an exchange discount or store credit instead of returning it for cash. 

  • Incorrect Gifts Bought

Purchasing presents is tricky since the customer can be unfamiliar with the taste and preferences of the recipient. This is not uncommon so offer alternative or complementary products/services to help educate the customers to reduce the store return rate. 

In addition to defining why certain products are being returned, it is helpful to introduce the M2 credit care program. The process of store credit should be properly defined to make sure that customers have a clear idea of how the process works. 

Some clients can deliberately take advantage of the lenient return policy by purchasing items, using them once and then returning them to the store. Then, there are individuals who order multiple sizes of a product to find the right fit and return the rest. These and other tactics are documented in a study by Narvar that indicates that more customers are buying products with an intent to return some or all items later on. 

Magento 2 Store Credit Infographics

Ecommerce businesses realize that returns are part of successful customer experience, but that doesn’t mean that they should become a major operational liability. 

For this reason, it is essential that Magento powered online stores should make M2 credit policies that are a win-win for both the customers and business revenues. The way stores deal with returns before and after the purchase can differentiate their brand, impact their competitive advantage, and profitability. 

So, in order to keep the customers satisfied, it is important to have an efficient return and refund policy with several customer-focused options. In this context, Magento 2 store credit is a popular option that retains the money within the business. 

Let’s look closer at the major aspects of Magento store credit extension and how to implement it on your store.

Magento 2 Store Credit Extension

The Magento store credit extension allows store owners to benefit from: 

Flexible Return Policy

The plugin allows you to prolong the return duration beyond the standard 30 days and lets your clients get a Magento 2 store refund in the form of store credit. This adds usable funds in their store account and encourages them to shop more frequently at your store. This improves the conversion rate of your store. 

Automated Refunds as Store Credit

Using Magento 2 Store Refund extension, the store credit can be automatically calculated for a partial or full refund. The module prefills the store credit on the memo page for your convenience. 

Easy Store Credit Management

With the extension in place, customers can check their credit balance and redeem earned store credit for purchases on the store. In addition, the customers can check out transaction history with store credit balance updates. Similarly, business owners can view, add, and subtract store credit for each customer, send balance update emails, manage customer notifications, and find other required information in-store credit transaction history.  

Effortless Store Credit Redeeming

Clients can choose the Magento store credit payment option at checkout and redeem the accumulated store credits. Depending on the configuration of the Magento plugin, the store credit can be manually or automatically applied to the order subtotal, allowing merchants to use store credit while creating a new order at the store’s backend.

Merchandise Credit & Promotional Credit

The extension supports two types of store credits: Merchandise credit and promotional credit. The first option is deposited when customers return an item for store credit instead of the original form of payment (cash or credit card). On the other hand, customers earn promotional credit automatically when they subscribe to a promotion offer. The merchants can benefit from “earn store credit rules” that can help them run and optimize marketing campaigns efficiently. 

Store Credit Vouchers

Stores can also offer “Store Credit Vouchers” that allow automatic redeeming of customer store credit balance after purchase. Commonly, the customers that use store credit spend more than their credit balance which increases sales and per-transaction revenues. 

Integration with Plumrocket RMA Extension

The extension integrates nicely with Plumrocket Returns and Exchanges (RMA) for Magento 2 extension to expand the return policy options and improve customer retention. 

Compatible with Third-party Magento 2 themes

Magento 2 Store Credit extension works with any third-party Magento 2 theme. It is also compatible with Community and Enterprise editions of Magento 2 platform. 

All in all, Store Credit extension for Magento 2 offers better customer experience by offering an efficient and flexible return policy with several refunds and store credit options.

Merchants can give out customer credits, view transaction history, create marketing promotions and offer vouchers easily with this extension. And, it offers customers more convenience to shop from your store by using the store credit funds in their store account. 

Magento 2 Store Credit extension offers a free demo for store owners who want to try it before adding it to their stores. It requires no coding knowledge and installs in a few clicks. It comes with complete documentation and error/solution tips to avoid any inconvenience during the install process.

Wrapping up

Product returns have always affected the sales and revenues of ecommerce stores. Online shopping now demands an efficient return policy that makes returns painless. As a result, store credit policies have the potential of greatly improving store profits. Magento 2 store credit extension is an excellent tool to help create efficient return policy, build long-term relationships with customers, and increase conversion rates.

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Abdur Rahman

Abdur Rahman is the Magento whizz at Cloudways. He is growth ambitious, and aims to learn & share information about Ecommerce & Magento Development through practice and experimentation. He loves to travel and explore new ideas whenever he finds time. Get in touch with him at [email protected]

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