Gift Cards vs Store Credit on Shopify

Gift cards and store credit on Shopify both give customers a balance to spend at your store, but they differ in how they are created, who can use them, how they behave at checkout, and whether they generate revenue or represent a cost. The right choice depends on your Shopify plan and whether you need transferable value.

This guide covers the seven key differences, explains how Shopify implements each one, and identifies the scenarios where each option makes the most sense.

How Shopify Handles Each One

Gift Cards on Shopify

Gift cards are available on every Shopify plan. They work as a product: a customer buys a gift card, receives a unique code, and enters that code at checkout to apply the balance. Merchants can also create gift cards directly in the admin for promotional use or employee rewards.

Key characteristics:

• Available on all Shopify plans (Basic, Shopify, Advanced, Plus)
• Each gift card has a unique code
• Applied at checkout by entering the code
• Balance carries across multiple purchases
• Transferable (anyone with the code can use it)
• Shows as a product in your catalog (can be sold like any other product)

Store Credit on Shopify

Native store credit is a Shopify Plus feature. On Plus stores, merchants can issue store credit to a customer account, and it appears automatically at checkout. The customer does not need a code. The credit is tied to their account and cannot be transferred.

For non-Plus stores, there is no built-in store credit feature. Merchants who want store credit functionality on Basic, Shopify, or Advanced plans need a third-party app. Tools like Rise.ai offer store credit alongside gift cards, though at a higher price point.

Key characteristics:

• Native store credit requires Shopify Plus ($2,300/month)
• Tied to a customer account (not transferable)
• Applied automatically at checkout (no code entry)
• Issued by the merchant (not purchased by customers)
• Common uses: refunds, loyalty rewards, referral incentives

Seven Key Differences

1. Origin: Purchased vs Granted

Gift cards can be purchased by customers or created by merchants. A customer buys a $50 gift card as a product. A merchant creates a $25 gift card for a promotional campaign. Either way, the card exists as an independent item with its own code.

Store credit is always granted by the merchant. It does not exist as a purchasable product. Merchants issue store credit as an alternative to a cash refund, as a loyalty reward, or as a referral incentive. The customer receives it, but they never buy it.

Why it matters: Gift cards can be a revenue source (customers pay for them). Store credit is always a cost (merchants issue it for free). This fundamental difference shapes every other comparison.

2. Transferability

Gift cards are transferable. The code is the key: anyone who has it can use it. This is what makes gift cards work as gifts. A customer buys a card, gives the code to a friend, and the friend shops at your store. No account linkage required.

Store credit is account-bound. It lives on a specific customer's account and can only be used by that customer when they are logged in. There is no code to share, no way to gift it, and no way to transfer it.

Why it matters: If you want to reach new customers, gift cards are the tool. Every gift card given away has the potential to bring a first-time shopper to your store. Store credit only works for customers who already have an account.

3. Checkout Behavior

Gift cards require the customer to enter a code at checkout. Shopify's checkout has a dedicated field for gift card codes, and customers can apply multiple gift cards to a single order.

Store credit (on Shopify Plus) applies automatically. When a customer with store credit logs in and reaches checkout, the available credit appears as a payment option without entering any code. The experience is seamless but requires the customer to be logged into their account.

On non-Plus stores using third-party apps for store credit, the checkout experience varies by app. Some inject a field at checkout, others handle it through account pages. The experience is rarely as clean as native Shopify Plus store credit.

Why it matters: Gift cards offer a universal checkout experience that works for anyone with a code, logged in or not. Store credit offers a smoother experience for returning customers but requires account authentication.

4. Customer Acquisition vs Retention

Gift cards serve both acquisition and retention. As a purchasable product that is transferable, gift cards bring new customers to your store every time someone gives a card as a gift. As a reward or promotional tool, they also bring existing customers back.

Store credit is primarily a retention tool. Since it is account-bound and merchant-issued, it keeps existing customers engaged but does not introduce new ones. A customer with $20 in store credit has a reason to return. But that credit cannot bring in someone new.

Why it matters: If you need a tool that does double duty (acquisition and retention), gift cards cover both. If you are focused purely on keeping existing customers happy, store credit works well, though gift cards can do this too.

5. Shopify Plan Requirements

Gift cards work on every Shopify plan. Basic Shopify merchants can sell gift cards, create them manually, and accept them at checkout. No additional cost, no app required, no plan upgrade needed.

Native store credit requires Shopify Plus, which starts at $2,300 per month. For the majority of Shopify merchants on Basic, Shopify, or Advanced plans, native store credit is not available.

This is why many merchants on non-Plus plans use gift cards as a store credit workaround. Instead of issuing $20 in store credit (which they cannot do natively), they create a $20 gift card and send the code to the customer. The customer enters the code at checkout, and the experience is functionally similar.

Why it matters: Plan requirements make this a practical decision, not just a strategic one. If you are not on Shopify Plus, gift cards are your only native stored-value option.

6. Revenue Model

Gift cards generate revenue when sold. A customer pays $50 for a $50 gift card. That money is in your account immediately, recorded as deferred revenue (a liability) until the card is redeemed. Gift cards also drive incremental revenue: recipients consistently spend more than the card's value.

Store credit is always a cost. When you issue $20 in store credit for a refund, you are giving back $20 in value. When you issue $10 in store credit as a loyalty reward, that is $10 in marketing spend. Store credit never generates upfront revenue.

Why it matters: Gift cards can be both a product and a marketing tool. Store credit is exclusively a marketing and service tool. If you want stored value that also appears on your revenue line, gift cards are the path.

7. Marketing Use Cases

Gift cards serve a wide range of marketing purposes:

• Promotional campaigns (buy-one-get-one, bonus value)
• Employee rewards and corporate gifting
• Win-back campaigns for lapsed customers
• Referral incentives
• Seasonal promotions

Store credit fits a narrower set:

• Refund alternatives ("Would you prefer store credit instead of a refund?")
• Loyalty program rewards
• Referral incentives (for the existing customer side)
• Compensation for service issues

The overlap is in loyalty and referrals. Both tools work for rewarding repeat customers and incentivizing referrals. The difference is that gift cards add acquisition (the referred friend can receive a gift card) while store credit stays within your existing customer base.

The Gift Card as Store Credit Workaround

On non-Plus Shopify stores, merchants commonly use gift cards as a substitute for store credit. The workflow looks like this:

1. Customer requests a refund or earns a loyalty reward
2. Merchant creates a gift card for the appropriate amount
3. Merchant sends the gift card code to the customer
4. Customer enters the code at their next checkout

This works, and many merchants run their entire loyalty and refund programs this way. The main limitation is that gift card codes are transferable (the customer could give it to someone else), which may or may not be a concern depending on your business.

For merchants running this workflow at scale (issuing dozens or hundreds of gift cards per month for refunds, loyalty, or rewards), creating cards one at a time in the Shopify admin becomes tedious. Bulk creation tools handle the volume, and you can organize cards by purpose using batch names and custom code prefixes.

When to Use Gift Cards

Choose gift cards when:

• You want to reach new customers. Gift cards bring new people to your store through gifting.
• You are not on Shopify Plus. Gift cards are your native stored-value option on all plans.
• You need a purchasable product. Gift cards generate revenue when sold. Store credit does not.
• You want transferable value. Corporate gifting, employee rewards, and B2B programs all require values that can be handed off to others.
• You need bulk issuance. Tools like BatchCard let you create gift cards in bulk for campaigns, rewards, and promotions.
• You run customer loyalty programs and want the flexibility of both retention and acquisition.

When to Use Store Credit

Choose store credit when:

• You are on Shopify Plus and want seamless automatic checkout application.
• You primarily issue refund alternatives. "Keep store credit instead of waiting for a refund" is a strong value proposition when the credit applies automatically.
• You want account-bound value. If preventing transfer is important (e.g., high-value refund credits you do not want shared), store credit is more restrictive by design.
• You use a third-party loyalty app that manages store credit alongside points and tiers.

Comparison Summary

Getting Started

If you are deciding between gift cards and store credit for your Shopify store, start with your plan type. On Basic, Shopify, or Advanced plans, gift cards are your only native option, and they cover most use cases well.

If you are on Shopify Plus, use both: gift cards for revenue-generating and transferable scenarios, store credit for refunds and account-specific rewards.

For merchants using gift cards as a store credit workaround at scale, BatchCard's bulk creation handles the volume. Create batches for refunds, loyalty, or rewards programs, and keep them organized with batch names and code prefixes. The free plan includes 25 cards per month to test your workflow.

For a detailed look at how gift cards compare to discount codes (another common alternative), see Gift Cards vs Discount Codes: Which Should You Use?. And for merchants evaluating third-party tools, our Rise.ai comparison covers pricing and feature differences.