Have you ever returned an item to a store for a refund and was offered “In Store Credit” instead? In-store credit means that instead of giving the customer a cash refund, he is given credit towards a future purchase in that particular store. A credit means that the store owes the customer money, which will be applied to anything bought at that store in the future.
For example, let’s say you were given a shirt for your birthday that you really don’t like. The shirt is worth $20 and still has the tags, but you don’t have the original receipt showing what was paid for the shirt. Instead of handing you the $20 refund in cash, the store clerk may decide to issue a gift card or a piece of paper with a $20 credit instead. The next time you visit the store, the gift card or paper acts like a coupon and will take $20 off the price of the new items.
Some stores won’t issue a cash refund even with the receipt and prefer to give out store credits. Small shops, thrift stores, and specialty shops are a few examples of stores that might not give out cash refunds, especially on sale or clearance items.
Store credits are also used at places that take “used” items, such as books, CDs, and DVDs. Instead of getting cash for these items, the store will offer customer a credit to be used against an other item in the store. This keeps a customer’s business in the store instead of shopping somewhere else for books or DVDs.
There’s a number of reasons why a store may issue in-store credits instead of a cash refund
* If you don’t have the original receipt, store credits limit the liability of the store in case the item was stolen. This way, the store has not lost cash, and is only out the wholesale price of the new item which is far less.
* Cuts down theft. A person is less likely to steal from a store if he or she knows that he won’t get cash for ‘returning’ stolen merchandise.
* Stores also know that an “in-store credit” will keep the customer in their store looking for a replacement item instead of taking their business somewhere else.
It’s important to remember that store credits are like cash and should be kept in a safe place until you are ready to shop again. If you’ve lost your gift card or paper credit slip, there’s no way to get that money back.