Store Credit vs Points: Which Loyalty Model Works Better for Shopify
Points are a currency you control; store credit is money Shopify holds for the customer. Here is how the two models differ, and when each one fits.
Points and store credit are both ways of paying customers to come back, but they behave differently at the moment that decides everything, which is checkout. Points are a currency you invent: customers collect them and trade them in for a reward you define. Store credit is real money Shopify holds on the customer's account, and it spends itself when they check out. Points buy you flexibility and a goal for customers to chase. Store credit buys you simplicity and a reward that reads as cash.
Here is how each one works on Shopify, what neither one can do, and how to tell which fits your store.
What loyalty points actually are
Points are a balance your loyalty app owns. You decide what earns them (orders, a signup, a birthday, a product review, a referral) and what they are worth when they come back out.
Redemption is a swap. The customer trades a number of points for a reward you set up in advance: a fixed amount off, a percentage, free shipping, a free product. Most apps turn that swap into a real Shopify discount code, applied at checkout like any other code. If you want to see how the arithmetic works in practice, how Shopify loyalty points work walks through earn rates and redemption values, and the points calculator does the sums for your own numbers.
Two things are worth knowing before you compare. Points are arbitrary, so their value is whatever you say it is; 100 points can be one dollar or ten. And points do not expire on their own. In Essential Loyalty expiry is a setting you switch on yourself, with a window of 6, 12, 18 or 24 months, and it is off until you do.
What Shopify store credit actually is
Store credit is native to Shopify. It is a balance sitting on the customer's account, and most shoppers have met it before as the thing they got instead of a refund.
The mechanics are short. There is no code. When a logged in customer reaches checkout, their credit applies itself. You can give a credit an expiry date or leave it open, it is issued in your store's default currency, and Shopify caps an account at 15,000 dollars. If a customer holds several credits with different expiry dates, Shopify spends the one expiring soonest first.
That “no code” part is the whole appeal, and it is also why store credit rewards work on any Shopify plan. Redeeming loyalty points inside the checkout itself normally requires Shopify Plus.
The differences that decide it
| Points | Store credit | |
|---|---|---|
| Who holds the balance | Your loyalty app | Shopify, on the customer's account |
| What the customer does to use it | Picks a reward, then applies a code | Nothing; it applies at checkout |
| Login required | Not to earn; usually yes to redeem | Yes, and new customer accounts |
| Partial spend | Yes, they choose how much to spend | No; Shopify applies the whole balance |
| Expiry | Optional, you control it | Optional, set per credit |
| In store at POS | Redeemable as a discount | Not available today |
| What it feels like | A goal to reach | Money already in their pocket |
When points are the better fit
Choose points when the program needs to do more than discount an order.
Points carry a catalogue. Free shipping, a free product, a percentage off a bigger basket: each of those is a different reward at a different price, and that range is what makes a program feel worth joining. Store credit has one shape, which is money off.
Points also power tiers. VIP tiers qualify customers on a single accumulator, so a program that mixes currencies cannot rank anyone; you cannot add 340 points and 5 dollars. If tiers are part of the plan, points are the currency underneath them.
And points reach more of your customers. Earning needs no account, and redemption produces a code that works wherever codes work, including in store at POS. If a good share of your orders are guest checkouts, points meet those shoppers where they are.
When store credit is the better fit
Choose store credit when the friction of redeeming is the thing hurting you.
Nobody has to remember anything. There is no code to copy, lose, or type wrongly on a phone, which quietly removes one of the most common support tickets a loyalty program generates. The value is legible too: 7 dollars means 7 dollars, where 350 points means nothing until the customer works out the exchange rate.
It also lands at the right moment. The balance shows up at checkout without the customer going looking for it, on any Shopify plan, which is the part most competing setups charge for.
Store credit suits stores where people already think in returns and exchanges, where baskets are considered rather than impulsive, and where the loyalty program is meant to be quiet rather than gamified.
What store credit cannot do on Shopify today
This is the honest list, and it is short enough to check against your own store in a minute.
It is all or nothing. Shopify applies the full available balance at checkout, so a customer with 60 dollars of credit cannot spend 20 and keep the rest for later.
It needs new customer accounts. Store credit is only redeemable by a customer authenticated through Shopify's new customer accounts; on classic accounts it cannot be spent. If you have not migrated, that is the first thing to fix.
It is single currency. Credit is issued in your store's default currency, so a shopper checking out in another one will not see it.
It skips some orders. Store credit is generally not used on subscription renewals or on draft and edited orders.
And in Essential Loyalty specifically, store credit rewards are on the Essential plan and above, they are currently in beta, and they are not in the POS redemption list yet.
You do not actually have to choose
The framing of this article is a false choice for most stores, and it is worth saying so plainly. The two models combine: run points as the program, and offer store credit as one of the things points can buy.
In practice the customer collects points in the usual way, spends them on a Store Credit reward, and native Shopify credit lands on their account. At checkout it applies itself. They get the simplicity of credit; you keep the tiers, the earning rules and the catalogue that only points can support. The requirements above still apply: the Essential plan or higher, new customer accounts, and the feature is in beta.
To be clear about one thing people often assume: this is a reward customers choose, not a percentage handed back automatically on every order. Automatic cashback is a different model, and it is not something we ship today.
How to choose, in three questions
Do your customers check out logged in? If most of them do not, store credit will never reach them and points with codes will.
Do you want tiers, or a range of rewards? Then points, with store credit available as one of the rewards.
What do customers complain about? If it is forgotten codes, store credit removes the problem. If it is not knowing what the program is for, a visible points goal fixes more than credit will.
If you are weighing this up while also weighing up apps, the loyalty program guide covers the program design end, and the comparison of Shopify loyalty apps covers the tools. If you already run a program somewhere else and the model is the reason you want to move, balances and tiers can come with you; switching loyalty apps without losing customer data covers what survives the move. The head-to-head pages for Smile and Growave show how each one handles redemption if you are comparing specific apps.
Store credit vs points on Shopify: common questions
See how store credit rewards work- Store credit works better when customers check out logged in and the reward should spend itself. Points work better when you want VIP tiers, a catalogue of rewards, and earning that guest shoppers can join.
- Shopify store credit is a money balance held on a customer's account and spent at checkout like a gift card, with no code to enter. Shopify issues it natively, most often in place of a refund.
- Cashback returns a set percentage of every order automatically. Store credit as a loyalty reward is chosen: the customer spends points, and credit lands on their account. Essential Loyalty ships the redemption model; automatic cashback is not live.
- Yes. In Essential Loyalty a Store Credit reward is one of the things points buy: the customer spends points, and native Shopify credit is issued to their account. It needs the Essential plan or above and new customer accounts.
- No. Shopify store credit only applies for a customer signed in through new customer accounts, so a guest checkout cannot use it. Loyalty points carry no such limit while earning, which suits stores with heavy guest traffic.
- Shopify store credit expires only if an expiry date is set when it is issued; otherwise the balance stays open. Essential Loyalty offers windows from 24 hours to one year, and Shopify spends the soonest expiring credit first.
- Loyalty points expire only if the merchant switches expiry on. In Essential Loyalty points expiry is off by default, with a window of 6, 12, 18 or 24 months. Reward codes expire separately and usually sooner.
- No. Shopify applies the whole available store credit balance at checkout, so a customer cannot spend part and save the rest. Points work the other way: the customer chooses how many to spend and keeps the remainder.
Written by
Milda Gaigalaite
Content and SEO specialist at Essential Apps. 8+ years in digital marketing, with the last 3 spent deep in the Shopify space, understanding how merchants grow and what gets in the way.
