If you're a small Shopify store owner, you've probably felt the pressure to offer big discounts just to attract or retain customers. But while 10% or 20% off coupons might boost sales in the short term, they can slash your profit margins. What if there was a smarter way to incentivize shoppers without sacrificing so much profit?
Enter Shopify Store Credit - a conversational, engaging strategy that's like giving customers free money to spend in your store, but on your terms. In this guide, we'll explore why Store Credit is a cheaper (and more profitable) alternative to traditional discounts, how memberr’s real-world customer data backs this up (hint: it’s like giving only 5-7% off instead of 10-20%), and how you can set up Store Credit step-by-step in your Shopify store using memberr. By the end, you'll see how Store Credit can boost customer retention and profitability for your business, and you'll have the tools to implement it yourself. Let's dive in!
The Problem with Big Discounts: Goodbye Profits
Running a small online store means every percentage point of profit counts. Yet many merchants feel forced to dangle 10%, 20%, or even higher discounts to compete. The issue? Those discounts come straight out of your bottom line.
- Thin Margins: If your profit margin on a product is say 20%, giving a 20% discount wipes out your profit on that sale. Even a 10% discount eats half the margin. For big retailers with huge volume this might be okay, but for a small store it hurts a lot.
- Customer Expectations: Once you start offering frequent discounts, customers might wait for the next sale and become unwilling to buy at full price. This can devalue your brand and make discounting a vicious cycle.
- Race to the Bottom: Competing on deep discounts isn’t sustainable long-term. You might win a sale today and lose money doing it, while training customers to expect cheap deals tomorrow.
In short, heavy discounting can backfire - you lose profit on each sale and risk making your product seem less worth its full price. But you still want to reward customers and encourage them to buy, right? This is where Store Credit comes in.
Store Credit vs. Discounts: Keeping Your Profit Margins Healthy
Shopify Store Credit is essentially a form of virtual currency for your store - credit that you issue to customers which they can spend only with you (Store Credit Overview | memberr Docs). Instead of giving someone 10% off right now, you might give them $10 in credit to use on a future purchase. From the shopper’s perspective, it feels like a generous reward (they have “free” money to spend later). From the merchant’s perspective, it’s a much smarter deal. Here’s why Store Credit is a cheaper alternative to discounting:
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You Keep the Money in Your Store: With a normal discount, 10% off means 10% less revenue immediately. With Store Credit, if you give 10% of an order back as credit, you collect the full payment today. The customer gets value, but the cash stays in your business until they use that credit. For example, instead of offering 10% off to everyone (instantly cutting into your revenue), giving 10% back in Store Credit keeps the money in your store and encourages another sale (Shopify Store Credit vs. Gift Cards). In essence, you're offering a perk without devaluing your product, a tactic that protects your margins while still rewarding the customer (Shopify Store Credit vs. Gift Cards).
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Lower Effective Discount (5-7% vs 10-20%): Here’s the kicker from memberr’s customer data: not all issued Store Credit actually gets redeemed, and when it does, it often leads to additional purchases. In practice, this means the real cost of giving Store Credit is much lower than an equivalent coupon discount. Based on memberr’s analysis of many Shopify stores, merchants found that using Store Credit ended up being like giving only 5-7% off on average (in terms of revenue lost), instead of the 10-20% they would have given with coupons. This is huge for your profits. You're basically getting the same customer response as a big coupon, at half the cost to you. Why? Some customers never fully use their credit, and those who do often spend beyond the credit amount, increasing your sales.
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Encourages Repeat Purchases: A coupon knocks down the price once. Store credit, on the other hand, nudges the customer to come back to your store to use it. Even a small credit (like a $5 reward) gives customers a continuous incentive to return and shop again (Shopify Store Credit vs. Gift Cards). By offering credit instead of a one-time discount or refund, you retain value within your ecosystem (the customer has to return to spend that credit) and prompt another purchase (Shopify Store Credit vs. Gift Cards). This strategy has been shown to increase customer retention and repeat sales (Shopify Store Credit vs. Gift Cards). Essentially, you’re turning a one-time buyer into a repeat customer without spending extra on marketing.
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Customers Tend to Spend More: Store credit often leads to higher order values when redeemed. Customers see Store Credit as a bonus or a discount on their next purchase, and psychologically, they're inclined to treat themselves to something a little pricier. For example, a customer with a $20 Store Credit might decide to buy a $50 item they were eyeing - effectively upselling themselves because they feel they're getting a $20 deal for free (Shopify Store Credit vs. Gift Cards). In this way, that credit not only brings the customer back, but also encourages them to spend beyond the credit amount. You get a larger sale, and the customer walks away happy for having gotten a “deal.”
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Preserves Your Brand Value: Constant discounts can make your brand look cheap or desperate to sell. Store credit is different - it feels like a gift or reward rather than a price cut. You’re not devaluing the listed price of your products; you’re offering a thank you that still maintains the product’s full price in the customer’s mind. This helps protect your brand integrity and perceived value. You’re rewarding loyalty, not just lowering prices.
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Higher Lifetime Value & Loyalty: Because Store Credit encourages repeat business and larger purchases, over time it can significantly boost a customer’s lifetime value to your store. Shoppers develop a habit of returning to use credits, and they appreciate the rewards. Continuously giving a bit back (in credit) for each purchase fosters a sense of goodwill and loyalty towards your brand (Shopify Store Credit vs. Gift Cards). Customers feel valued when they see that their ongoing business earns them rewards, and they’re more likely to stick with you instead of drifting to a competitor (Shopify Store Credit vs. Gift Cards). All of this means they’ll shop with you more often in the long run.
In summary, Store Credit lets you offer incentives that drive repeat business and bigger baskets, all while keeping your profit margins far healthier than if you were handing out blanket discounts. It’s a win-win: customers get a reward they love, and you get to keep more revenue and loyalty.
So, now that you're convinced (or at least curious) that Shopify Store Credit might be the secret weapon for your small store, how do you actually implement it? Let's walk through the steps to set up a Store Credit system in your Shopify store using memberr, a leading Shopify app that makes managing Store Credit easy.
How to Set Up Shopify Store Credit with memberr (Step-by-Step Guide)
One great thing about Shopify is that you can extend its functionality with apps. memberr (also known as the Store Credit Suite app) is a popular solution that helps you manage Store Credit and loyalty rewards seamlessly. You don’t need to be a tech expert or write any code - memberr’s user-friendly interface takes care of the heavy lifting so you can set up Store Credit in minutes (Mastering Shopify Store Credit: Boost Customer Loyalty and Sales). Below is a step-by-step guide to get you started:
1. Install the memberr Store Credit App
To begin, head over to the Shopify App Store and search for “memberr - Store Credit Suite.” Click the Add App button and follow the prompts to install it on your Shopify store. (You can also find it via memberr’s website.) Shopify will ask you to grant the necessary permissions so memberr can integrate with your store (this is normal for any app). Once installed, memberr will be available in your Shopify admin Apps section.
Tip: memberr is designed to integrate quickly with Shopify’s latest features, so setup is fast. In fact, you can usually set up and start benefiting in minutes (memberr | Store Credit Suite - memberr Store Credits & Loyalty | Shopify App Store).
2. Do the Initial Configuration
After installation, open the memberr app from your Shopify admin. The app will guide you through a quick configuration wizard. This usually involves:
- Enabling Store Credit: memberr works with Shopify’s native Store Credit system, so it may prompt you to enable Store Credit features if they aren’t on already.
- Syncing Customer Accounts: The app will ensure all your existing customer accounts are ready to have Store Credit balances. (If you don’t have Shopify’s new customer accounts enabled, memberr will help set that up too.)
- Setting Preferences: You can choose some basic settings, like whether store credits should expire after a certain time, if you want to set a default cashback rate (e.g. give 5% of each purchase back as credit automatically), and how you want credits to appear to customers. All these settings are optional and can be changed later. The key is memberr makes it straightforward - you just fill in a few fields or toggle options in their dashboard. The interface is clear and non-technical, so you can do this on your own without any developer help (Mastering Shopify Store Credit: Boost Customer Loyalty and Sales).
memberr will also typically install widgets or extensions to your store theme that display the customer’s Store Credit balance (for example, on the account page or at checkout). Make sure to enable these if prompted - this allows your shoppers to see and use their credit easily. The app may handle this automatically, or provide simple instructions (like one-click enable for a theme extension).
3. Issue a Test Store Credit
With the basics set up, it’s time to see Store Credit in action. A good practice is to issue yourself (or a test customer) a small amount of Store Credit to experience the process as both the merchant and the customer. Here’s how:
- In the memberr app dashboard, go to the Customers or Store Credit section. You should see a list of your customers (or you can search for a specific customer by name/email).
- Select your own customer account (or a friend’s account who can help test).
- Click on “Add Store Credit” (or a similar button within the app). Enter a test amount, like $5 or $10, and add a note (e.g. “Test credit” or “Thank you for being a customer”). Save or confirm the issuance. memberr will now credit that customer’s account with the amount you specified.
- Now, pretend you are the customer: log into your store using that customer account (or use Shopify’s “View account as customer” feature if available). Add a product to the cart and go to checkout. You should see an option to apply your Store Credit to the purchase (usually on the payment page, the credit will show up as an available balance you can use). Try applying it to ensure it deducts from the total.
- Complete the checkout (you can use a test payment method if you don't want to actually charge a card). Verify that the Store Credit was applied correctly to the order. Also check that the remaining credit balance (if any) updated properly in the customer account.
This test confirms that everything is working smoothly: the credit can be issued, the customer sees it, and it can be spent during checkout. memberr’s integration with Shopify means this should all feel seamless to the customer, just like using a gift card or discount code, except it’s even easier since the balance is automatically there for them.
4. Start Using Store Credit in Your Strategy
Now that you know the mechanics work, it’s time to put Store Credit to use for real. Think about where giving Store Credit would benefit your business most. Some ideas:
- Replace Discounts with Credit: If you usually offer a “10% off your first purchase” coupon to new customers, try offering a Store Credit reward instead. For example, “Sign up and get $5 in Store Credit towards your next purchase.” The customer pays full price on their first order (protecting your margin), and you give them $5 to encourage a second order. You’ve essentially given ~5% back on what might have been a $100 order, instead of 10% off upfront.
- Refunds and Returns: Update your refund policy to offer Store Credit for returns. When a customer requests a return, you can say: “We can refund you via Store Credit instantly, so you can pick something else you love.” Customers often appreciate the immediate resolution. Using memberr, you can issue the credit for the return in one click. This keeps the money in your store and often leads the customer to make a new purchase with that credit (possibly spending more than the credit value).
- Loyalty Rewards / Cashback: You can implement a simple loyalty program by granting Store Credit for every purchase. For instance, give 5% of each order back in Store Credit. memberr can automate this (it has a cashback feature). So if someone spends $200, they automatically get $10 credit for next time. This encourages them to return and builds goodwill, while only costing you 5% in Store Credit (versus maybe having to offer a 20% sale to get them back in the future).
- Targeted Promotions: memberr also allows you to run Store Credit campaigns for specific customer segments. For example, you could send a $10 credit to all customers who haven’t purchased in 6 months as an incentive to come back. Or reward your top 100 customers with a bonus $20 credit as a thank-you. These kinds of targeted credits can drive sales during slow periods without broadcasting a public discount. The best part is you can do this right in the memberr app (under a “Campaigns” section) by selecting a customer group and sending Store Credit in bulk - no need to manually email codes or anything. It’s a very flexible marketing tool that keeps customers engaged continuously, as opposed to one-time coupon blasts.
memberr provides detailed analytics as well, so after you start using Store Credit in these ways, you can monitor key metrics: What percentage of credit is redeemed? Are customers coming back faster? Is your average order value increasing with credit use? (Many merchants find that orders using Store Credit tend to be larger, as we discussed earlier.) These insights will help you fine-tune your strategy over time (Mastering Shopify Store Credit: Boost Customer Loyalty and Sales).
5. Communicate & Educate Your Customers
As you implement Store Credit, make sure to tell your customers about it! The beauty of Store Credit is only realized if customers know they have it and how to use it. A few tips:
- Add a note on your storefront or announcement bar: e.g. “🎁 Join our rewards program - get Store Credit on every purchase!” This lets new visitors know there’s a benefit to shopping with you beyond just the products.
- Update your FAQ or create a page explaining your Store Credit program. Keep it simple: explain how customers can earn credit (through purchases, promotions, referrals, etc.) and how to redeem it at checkout.
- If you issue credit for a specific reason (like a refund or a promo), send the customer a personal email letting them know about it. For example: “We’ve added $15 in Store Credit to your account as a thank you for your purchase/refund. You can use it on your next order - just log in with your email, and you’ll see your credit at checkout.”
- Use memberr’s integration with email marketing (like Klaviyo or Shopify Email) to automatically notify customers when they earn credit. A quick “You just earned $X credit!” email can delight them and prompt a return visit to your site.
- On your site, memberr’s widgets will show customers their balance (for instance, on the account page or even in the cart). This gentle reminder helps customers remember to use their credit. Seeing “You have $10 credit” in their account is often enough to spur them to shop so they don’t “waste” that free $10.
By communicating openly and making the process easy, you ensure customers take advantage of the Store Credit - which is exactly what you want, because it means repeat business for you.
6. (Optional) Test and Refine
As a final ongoing step, treat your Store Credit program as something you can refine over time. Monitor how it's going:
- Are customers using the credit quickly or do they let it sit unused?
- Do you see an uptick in repeat purchases and are your profits better on those orders compared to when you ran discounts?
- Is there any confusion from customers about how to use the credit? (If so, improve your communication or instructions.)
- Try adjusting the amounts: maybe you started with 5% back in credit - see what happens if you try 7% for a month, or perhaps a flat $5 on orders over $50. Because Store Credit costs you less, you have some wiggle room to experiment without breaking the bank. memberr’s analytics dashboard will help here, as it can show you redemption rates and incremental sales from credit usag (Mastering Shopify Store Credit: Boost Customer Loyalty and Sales)].
The goal is to find the sweet spot that maximizes customer happiness and loyalty, while minimizing cost to you. Every store is a bit different, so use the data to guide you. The good news is that by using Store Credit instead of straight discounts, you're likely already saving money and keeping profit that would have otherwise been given away. Now it's about optimizing and growing that success.
Ready to Boost Retention and Profits? (TLDR & Next Steps)
Heavy discounting might seem like the easy way to win customers, but as we've seen, it can be expensive for your business. Shopify Store Credit offers a smarter path: it rewards customers, encourages them to come back, and crucially, it keeps your profit margins intact. Instead of giving away 20% of your revenue, you could be giving away effectively only ~5-7% and gaining a loyal customer in the process. That’s a game-changer for small store owners who count every dollar.
By now, you should understand not just why Store Credit is a fantastic alternative to coupon codes, but also how to set it up step by step using memberr. The best part is, you don't have to wait or get anyone's permission to start - you can do it today. memberr's app makes it straightforward to launch a Store Credit program on Shopify, even if you’re not tech-savvy. Many merchants have already transformed their discount strategy into a credit-based strategy and are seeing higher profits and better customer retention because of it.
So, what are you waiting for? It’s time to protect your margins and invest in customer loyalty. You can set up memberr on your own by following the guide above - install the app and start issuing some credit to see the magic happen. If you prefer a helping hand or want to accelerate your results, you can also book a free setup call with the memberr team. They’ll walk you through best practices, help tailor the settings to your business, and answer any questions to get you confident with your new Store Credit system.
Either way, the takeaway is clear: shifting from heavy discounts to a smart Store Credit program can boost your profits and keep customers coming back for more. Make the switch and watch your customer loyalty and sales soar (without slicing into your margins (Mastering Shopify Store Credit: Boost Customer Loyalty and Sales)]. Your future self - and your bottom line - will thank you!
Start leveraging Shopify Store Credit and say goodbye to loss-making discounts. Your customers will love it, and your business will love the results. Try memberr’s Store Credit solution or schedule a setup call to get started on this more profitable path today. Good luck, and happy selling!