Gift cards, store credit or coupons, what is the difference?
These three get mixed up but they are different promises, and knowing which is which helps you pick the right way to give value back to a customer.
Sellers often use these three words as if they mean the same thing. They do not. Each is a different kind of promise, with a different effect on your money. Getting them straight will save you from muddled offers.
Coupons
A coupon is a discount on an order. The customer types a code and pays less. Nobody paid you anything in advance for it. It is a marketing tool, a way of saying "here is a saving for buying now."
Coupons usually have limits, such as an end date or a maximum number of uses. In Varchas Stores you can create coupon codes in the admin, as a percentage or a flat rupee amount, and cap the uses and set an expiry. See what is a discount code and coupon.
Gift cards
A gift card is money paid in advance for a future purchase, usually bought by one person for another. Someone hands you Rs 1,000 today, and you owe the holder Rs 1,000 of goods later. In accounting terms it is a promise to deliver, not a sale yet.
That means you need a way to issue a unique card, track its balance and prevent it from being used twice. You must also think about expiry and how to explain what happens if it is lost.
Store credit
Store credit is money you owe a customer that they can spend only in your store. It usually arises from a refund, a return or a goodwill gesture. Instead of sending money back to their bank, you give them a balance. Unlike a coupon, it is the customer's own money, so you should treat it carefully and keep a clear record of balances.
Quick comparison
- Coupon: a discount you give. No money received. Marketing.
- Gift card: money received now, goods owed later. Often a gift.
- Store credit: money you hold for a customer after a refund or goodwill. Their balance.
What your store supports
I must be plain here. Varchas Stores supports coupon codes. I did not find gift cards or store credit in the product, so I will not suggest you can sell or issue them there. If you want to give a gift, a gift hamper product, or a coupon with a limited number of uses, is the closest option available. See how to start selling gift hampers online in India.
When a small seller would pick each
- Want to reward a loyal buyer? A coupon with a limit.
- Customer returned a product and wants to buy again? Offer a refund, or ask whether they prefer an exchange. See exchange versus refund policy, which should you offer.
- Want to sell a present that someone buys for another person? A gift product, shipped with a note, can do the job without tracking balances.
A caution
Whatever you offer, write the rules down. State whether it expires, whether it can be combined, and whether it can be exchanged for cash. Vague terms cause arguments. Check current consumer rules if you plan to hold balances for customers, and keep your records tidy.
If you are only starting, coupons are the simplest of the three, because they ask nothing of you until they are used.