Gift Cards vs Discount Codes vs Store Credit
🤔 Choosing between gift cards, discount codes, and store credit.
Gift Card Factory works with three types of value you can give to customers: gift cards, discount codes, and store credit. They look similar at first, but they behave very differently at checkout, in your accounting, and in how the customer experiences them. Picking the right one is usually the most important decision when planning a campaign.
🧠 Quick Summary
Gift card — a code anyone holding it can spend. Used as a payment method at checkout. Best for transferable, prepaid balances.
Discount code — a code that reduces the price of an order. Treated as a discount, not a payment. Best for promotions and incentives.
Store credit — a monetary balance attached to a customer record, redeemable at checkout. Best for refunds, compensation, and account-bound rewards.
Store credit has an important prerequisite. Per Shopify, "the account balance is redeemable at checkout only when the owner is authenticated via new customer accounts authentication" (source). If your store still uses classic customer accounts, customers won't be able to spend their store credit at checkout. You can check or change this in Shopify Admin → Settings → Customer accounts.
📊 Side-by-Side Comparison
What it is
Stored value (a Shopify gift card)
A coupon-style code with rules
Account balance on a customer record
Treated at checkout as
Payment method
Discount on the order
Payment method (account balance)
Account requirement
None — anyone with the code can redeem
None — depends on eligibility rules
Customer must be logged in via new customer accounts (Shopify docs)
Tied to a customer?
Optional (recipient/customer fields)
Optional (eligibility can target customers or segments)
Yes — always tied to one customer record (or a CompanyLocation for B2B, but Gift Card Factory only supports Customer)
Transferable?
Yes — anyone with the code can redeem it
Yes — any customer matching the eligibility rules can use the code
No — "the account…has an owner that cannot be transferred" (source)
Code required at checkout?
Yes (the gift card code)
Yes (the discount code)
No — applies automatically when the customer is logged in
Reduces order subtotal?
No (it's a payment, not a discount)
Yes
No (it's a payment)
Has an expiry option?
Yes (expiresOn, never / relative / specific)
Yes (startsAt / endsAt)
Yes (per-credit-transaction expiresAt, or never)
Multiple uses?
Until the balance is depleted
usageLimit (total) and appliesOncePerCustomer (per customer)
Until the balance is depleted
Counts as revenue when?
When redeemed at checkout
Reduces revenue per order at checkout
When redeemed at checkout
Refund-friendly?
Yes (issue a new card)
Less so (codes are not designed for refunds)
Yes — common channel for refunds
Native Shopify email?
Yes — Gift card created notification
No — emailing is up to the merchant
Yes — Store credit issued notification
Re-enable after disabling?
No. "After a gift card is deactivated, it can't be used for further purchases or re-enabled" (source)
Codes can be disabled and re-enabled in Shopify Admin
Balance can be debited but the account itself cannot be deactivated
🎯 When to Use Which
Use a gift card when…
Someone is paying for a value voucher (you sell gift cards as products).
You're running a giveaway, contest, or influencer campaign and want recipients to get prepaid balance.
You're rewarding employees or partners with transferable value.
Refunds need to remain transferable (e.g. the original buyer was a third party).
The recipient may not be logged in (or may not exist as a customer record).
→ See: Autogenerate, Bulk Send, Bulk Update, Import From File
Use a discount code when…
You want to offer a percentage- or fixed-amount discount on purchases.
You're driving acquisition (welcome codes), conversion (flash sales), or retention (VIP codes).
You want stacking rules (combine with product / order / shipping discounts), minimum-purchase requirements, or product/collection targeting.
You want unique tracking codes for influencers, channels, or partner campaigns.
→ See: Discount Codes Bulk Create, Discount Codes Bulk Send, Discount Codes Import From File
Use store credit when…
You're issuing a refund as in-store value rather than cash back.
You're compensating a known customer for a service issue.
You're rewarding loyalty members with account-bound balance.
You want the value to apply automatically at checkout, without the customer having to enter a code.
Your store uses new customer accounts — without this, customers can't redeem the credit.
→ See: Store Credit Bulk Add, Store Credit Import From File
🛠️ Available Operations Per Type
Generate codes (no email)
N/A — store credit always targets a customer
Update existing
Edit individually in Shopify Admin → Discounts
Adjust individually in Shopify Admin → Customers
❓ Common Points of Confusion
"Which one is best for refunds?" Usually store credit when the original buyer is the same person being refunded — Shopify treats it cleanly as account balance, and there's a native "Store credit issued" notification. Use gift cards if the buyer was a third party (corporate buyers, gift purchasers) since gift cards are transferable and don't require a customer account.
"Can a customer share their store credit with someone else?" No. Per Shopify, a store credit account "has an owner that cannot be transferred" (docs). It applies only when that owner is logged in. If you need transferable value, use a gift card.
"Will a discount code work alongside a gift card or store credit?"
Yes — discount codes reduce the order subtotal, then gift cards / store credit apply as payment for whatever's left. Stacking with other discount codes depends on the Combines with flags (DiscountCombinesWithInput) on each code.
"Does store credit count as a discount for accounting?" No. Both gift cards and store credit are recognized as payment at checkout, not as a price reduction. Discount codes are the only one of the three that reduce reported order revenue.
"Can I email a discount code only to the people I list, not to everyone?"
Yes. With Discount Codes Bulk Send, each recipient gets a unique code. You can additionally set per-code usage limits (e.g. one use per customer via Shopify's appliesOncePerCustomer) so even if the code is shared, only one redemption per customer is allowed.
"What if my customer doesn't have a Shopify customer record yet?"\
For gift cards, recipients without a customer record can be skipped or auto-created (configurable per operation).
For discount codes, no customer record is needed — codes are independent of customers (unless you set Eligibility to specific customers/segments).
For store credit, a customer record is required. Imports from file auto-create one from email if needed; the bulk-add form skips recipients without an existing record.
"My store still uses classic customer accounts. Can I issue store credit?" You can issue it, but customers won't be able to redeem it at checkout until you switch to new customer accounts. Per Shopify's docs, store credit is only spendable when the owner is authenticated via new customer accounts. Switch under Settings → Customer accounts in Shopify Admin.
"I issued a gift card for the wrong amount — can I just edit it?"
You can edit the balance via Bulk Update (using the balance column). However, you cannot re-enable a gift card once it's been deactivated — Shopify explicitly disallows this (docs). If you need to fix a deactivated card, issue a new one.
🔗 Related Reading
Recipients Selector — the four ways to pick recipients across operations.
Customers Query Selector — the syntax for dynamic recipient queries.
Sending Customer Notifications — how email delivery works for each method.
Shopify reference: GiftCard, StoreCreditAccount, DiscountCombinesWithInput.
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