How to Incentivize Exchanges & Store Credit with Bonus Credit in Shopify
As an online merchant, it’s important to provide a smooth and hassle-free shopping experience for your customers. This includes providing an efficient and easy-to-use return, exchange, and store credit process. However, when it comes to returns, exchanges, and store credit many merchants focus solely on the return process and overlook the benefits of incentivizing exchanges and store credit and the use of Bonus Credit.
An exchange is when a customer returns a product but instead of receiving a refund, they exchange it for a different product. Store credit is a payment method that enables customers to make purchases using a credit balance specifically allocated for a particular store. There are several benefits to incentivizing exchanges and store credit over refunds, such as salvaging a sale and increasing margins and customer retention. In this blog, we’ll discuss how to instantly incentivize a customer with ReturnLogic’s Bonus Credit in Shopify to optimize refund rates.
Optimize Refund Rates with More Exchanges & Store Credits
Exchanges and store credits are better for merchants than refunds because they can help you retain customers and increase sales. When a customer exchanges a product, they are still purchasing from your store, rather than returning the item and potentially buying from a competitor. When a customer chooses store credit, it indicates their intention to make future purchases from your store.
Shipping fees can be a pain for you and your customers, but with an exchange or store credit, you can feel good about knowing you have increased margins from the return. Exchanges and store credit can also increase customer retention as it shows that you care about their needs and are willing to work with them to ensure their satisfaction.
Incentivize Customers to Choose Exchange or Receive Store Credit Instead of a Refund
To encourage customers to exchange a product or opt for store credit instead of a refund, it’s important to give exchanges and store credit priority over other options. Merchants should consider listing exchanges and store credit as the first options when the customer initiates a return.
Offering an extended window for exchanges and store credit can help incentivize your customers to opt for an exchange or store credit instead of a refund. Providing free shipping for exchanges and store credit can also be a powerful incentive. Adding Bonus Credit to exchanges and store credit can further incentivize customers to choose an exchange or store credit over a refund.
Streamline the Shopify Ecommerce Exchange & Store Credit Process
To make the exchange and store credit process as smooth and efficient as possible, scaling merchants should consider implementing return automation workflows. This can include using strategic rules in your returns portal to protect against fraud, adhering to shipping policies, and simplifying accounting.
With ReturnLogic’s suite of Incentivization Tools, merchants can implement strategic shipping rules, visually de-emphasize refunds, and actively promote upsell opportunities by enticing shoppers with added Bonus Credit.
Offer Exchanges without Stripe Accounting Issues
There are many benefits of incentivizing exchanges over refunds in Shopify, but there is also an important detail that makes Bonus Credit different from our competitors. Unlike our competitors, ReturnLogic does not use Stripe for payment processing – all financial records are kept in Shopify.
Why is this important? Stripe can sometimes count an exchange as a new sale, which can lead to double accounting for sales, inaccurate inventory, and overstating the cost of goods sold.
Using Stripe to process exchanges can create serious problems for merchants as inaccurate sales numbers and inventory can lead them to believe they are doing much better financially than they truly are. Once a merchant realizes their books and inventory are off, it will cost time and money to get the problem fixed.
Leveraging tools like ReturnLogic’s Bonus Credit incentivizes exchanges without the risk of accounting issues that can occur with Stripe.
Reduce Return Fraud with Disposition Management
ReturnLogic’s Collector feature can also help combat fraud in the returns process. This feature enables warehouse teams to physically inspect the return and mark its disposition based on its condition.
This is an important safeguard against fraudulent returns, which can be a significant problem in the retail industry. For example, shoppers can game the system with competitors by buying multiple products, requesting refunds on all of them, and then only returning some of them.
Without the ability to mark the disposition of the return, warehouse teams would have no way of knowing if this kind of fraud is taking place. It’s important that merchants have a way to protect themselves against return fraud with disposition management.
Retain Customers and Protect Profits with Bonus Credit
Incentivizing exchanges and store credit over refunds can be a smart move for online merchants by optimizing the exchange and store credit process and offering incentives, merchants can increase customer retention, reduce costs, and increase sales.
While incentivizing exchanges and store credit over refunds can be a powerful tool to retain revenue and convert refunds into exchanges or store credit, it’s important to implement it correctly to avoid inflated sales and inaccurate inventory.
By using Bonus Credit and Shopify’s financial records instead of Stripe, and by utilizing tools like ReturnLogic’s Collector feature, merchants can streamline the exchange and store credit process and safeguard against fraudulent returns. This will ultimately lead to a more accurate financial picture and better inventory management.
With the right tools and strategies in place, Shopify merchants can make the exchange and store credit process as smooth and efficient as possible, resulting in happy customers, increased customer lifetime value, and a healthier bottom line.
Schedule a demo with a returns specialist today to find out more about our new Bonus Credit feature and how you can start incentivizing exchanges and store credit with your customers.
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