Last week I announced my latest obsession: Magecredit. Magecredit is a store credit extension for Magento. It all started a few months ago when I decided to tackle the problem that eCommerce stores experience a large amount of refunds in their lifetime. For some stores, this kills their performance. In fact, analysts have seen eCommerce store return rates of up to 25%¹, especially in the clothing industry. That’s a 1/4 of all sales!
So what are merchants doing right now to combat this issue? Well, they’re basically giving customers back their money and hoping that the customer decides to chose another product… In my calculations I’d consider this a lost customer unless you can find a way to keep the money in your store. From an accounting stance, returns look ugly as well (especially with the credit memo system native to Magento).
Magecredit helps solve these issues. If you can create credit memos and returns that go directly to store credit, you can incentivize customers not only to continue to shop at your store, but to also potentially increase their purchase size (as suggested by Tony Hsieh of Zappos in Delivering Happiness).
The first step of this journey to retaining customer value is to build the store credit extension for Magento. I’m focusing on Magento store owners simply because I know the Magento ecosystem very well and I can keep close to the merchants using store credit in their store so I can learn and adapt the system to be the best that it can be for merchants. Later I’m going to look at implementing the system for Shopify and BigCommerce, and even some of the larger platforms like Demandware.
So you see see, it’s much more than a Magento module to me. Magecredit is about increasing customer happiness and loyalty. I’m excited to see merchants succeed with it on their side.