Shopify store credit vs gift cards: how they work and when to use each

Customers ask for gift cards in November and December. They ask for refunds in January. Somewhere between the two, most store owners ask the same question, which is whether this money should go out as a gift card or as store credit.

Shopify supports both natively, and they look similar on a receipt. Underneath, they are different tools. A gift card is a code anyone can spend. Store credit is a balance tied to one customer. This guide explains how each works on Shopify today, what the admin can and cannot do, when to use which, and the tax and expiry rules you should check before selling your first card.

How Shopify gift cards work

Gift cards are available on all Shopify plans. There are two ways to create them.

Selling a gift card product. In Products, Gift cards, you add a gift card product. Each amount you offer, such as 25, 50 or 100, is saved as a variant of that product (Shopify help). When someone buys one, Shopify creates a card with a code and emails it. Gift card variants are set up by default as non-taxable, with no shipping and no inventory tracking.

Issuing a card yourself. From the same page you can create a gift card by hand, for example as a prize or to replace a lost card. Cards created in the admin can be worth up to 2,000 USD or the equivalent in your currency (Shopify help).

Sending a gift card to a recipient

If your theme supports gift card recipient fields, the buyer can send the card to someone else. They enter the recipient's email, and optionally a name, a message of up to 200 characters and a send date. Shopify's recipient guide says the feature arrived in version 9.0.0 of Shopify's free Online Store 2.0 themes and is available in Dawn and the Horizon family.

Two limits are worth knowing:

• A gift card can be scheduled up to 90 days ahead, and scheduled cards go out roughly between 4:00 and 10:00 in the buyer's timezone.
• The recipient form's validation doesn't support accelerated checkout buttons, such as Shop Pay or Apple Pay on the product page.

Spending and checking the balance

Customers enter the code at checkout. The balance can pay for the whole order, including tax and shipping, and a gift card can't be used to buy another gift card. To check what is left, the customer opens the gift card page from the link in their email, or looks at the card in Apple Wallet if they added it there.

What the admin cannot do

This is where most support questions come from:

• You can't change a balance. In Shopify's words, "gift card balances can't be edited directly from the Shopify admin" (Shopify help). If a customer was charged twice or you want to top up a card, the admin offers no button for it.
• Deactivating is permanent. A deactivated card "can't be reactivated, reloaded, or refunded onto".
• You only see the last four characters of each code in the admin, so you can't read a full code back to a customer who lost the email.
• There is no balance check in your storefront where a customer types a code. They need the original email.

Shopify's API does include actions to add funds to and remove funds from a card, which is how gift card apps offer balance adjustments.

How Shopify store credit works

Store credit is a balance on a customer's account. You add it from the customer's page in the admin or when refunding an order, and the customer spends it at checkout in your online store, in Point of Sale and in Shop.

The rules are stricter than for gift cards:

• It requires new customer accounts. Store credit "isn't available for legacy customer accounts", and customers can only use it when signed in through customer accounts or using Shop Pay.
• It belongs to one person. The balance can't be forwarded or given away.
• You can set an expiry for each amount you issue, or leave it without one. Expiry happens at the end of the day in your store's timezone.
• There is a cap of less than 15,000 USD per customer account.
• Currency matters. You can issue credit in several currencies, but checkout only shows the balance in the checkout currency.
• B2B works differently. Store credit on a customer profile works only in a direct-to-consumer store; for B2B you add it to company locations.

Refunding to store credit

When you refund an order, you can refund to the original payment method, to store credit, or both, and optionally set an expiry date on the credit. Staff need the "Refund to store credit" permission. This is the main reason stores adopt store credit. The money stays in the store, and the customer can buy the right size or colour without waiting for a card refund. Our step-by-step guide on how to give store credit on Shopify covers the manual, refund and POS routes.

Store credit vs gift card: side by side

When to use each one

Use gift cards when the money changes hands. Anything bought as a present, sold for a holiday or given by a company to its staff should be a gift card. The buyer and the person who spends it are different people, and only a code can travel between them.

Use store credit when the money stays with one customer. Refunds, apologies for a late parcel, a loyalty reward or a credit for a returned item that you would rather not refund in cash all belong to a specific person, and store credit keeps them there. It also cannot be resold or shared, which matters for promotions.

Watch the grey areas. A "gift card" you hand out as a discount for a complaint is really store credit, and it may be treated differently by tax and consumer law than a card someone paid for. If you give away codes for free, decide whether they are promotional before you write the terms.

Tax and expiry rules to check first

Shopify's help centre recommends that you "consult a local tax or legal expert", and so do we. These are the rules we checked while building our own gift card app, as a starting point for that conversation.

VAT in the EU and UK: single-purpose and multi-purpose vouchers

Since 1 January 2019, EU law (Council Directive 2016/1065) splits vouchers into two kinds:

• A single-purpose voucher is one where the place of supply and the VAT due are known when it is issued. VAT is charged when it is sold.
• A multi-purpose voucher is any other voucher. VAT is charged when it is redeemed, not when it is sold.

A gift card for a store that sells products with different VAT rates, or ships to several countries, is usually a multi-purpose voucher. That is why gift card products are typically set up without tax, because the tax is charged on the order where the card is spent. The UK follows the same split, explained in HMRC's guidance on vouchers.

Expiry dates in the US

Shopify's gift cards don't expire by default, partly because, as Shopify puts it, "it's illegal in some countries for gift cards to expire" (gift card settings). If you switch expiry on, the default is five years. That matches the US federal rule:

• Federal law (Regulation E, section 1005.20) says gift card funds must remain valid for at least five years after the card was issued or last loaded. Loyalty, award and promotional cards are excluded.
• California generally makes it unlawful to sell gift certificates with an expiry date or a service fee (Civil Code 1749.5), and balances under 15 USD must be paid out in cash on request. The threshold rose from 10 to 15 USD on 1 April 2026 (Morgan Lewis).
• Washington bans expiry dates, fees and dormancy charges on gift certificates (RCW 19.240.020) and requires small balances under 5 USD to be paid in cash on request.

Other states have their own rules, so if you sell in the US, the safe default is no expiry at all. Our gift card expiration laws by state guide goes through them one by one, and the California cash-out guide covers how to pay out small balances in Shopify.

Expiry dates in the EU

There is no single EU rule. The European Consumer Centre in Ireland notes that "there are no common rules in the EU on the minimum timeframes that vouchers must be valid for" (ECC Ireland); Ireland itself requires five years. Check the country where your customers are, not just your own.

Setting up gift cards in practice

For most stores, a sensible setup looks like this:

1. Create one gift card product with three to five amounts as variants.
2. Make sure your theme shows the recipient fields, so buyers can send the card on a birthday or holiday.
3. Leave expiry off unless you have checked the law in every market you sell to.
4. Switch to new customer accounts if you haven't, so you can refund to store credit.
5. Write a short gift card page in your store explaining how to use a card and where to find the balance.

GiftmintGift cards with emails that carry your logo, delivery on the day the buyer picks and a balance check in your store.See how it works

The gaps in the native setup are mostly about presentation and support. The gift card email is Shopify's notification template, which you change by editing its code. Balances can't be adjusted, and customers who lose the email can't check their balance. That is what gift card apps fill in, and our comparison of Shopify gift card apps shows what each one charges. It is also what we built Giftmint for. It creates native Shopify gift cards, so they keep working if you ever uninstall, and adds emails with your logo, balance adjustments with a reason, and a balance check on your store. If you are moving from another app, the guide on moving from Rise.ai covers the steps, and adding gift cards to your theme shows where the block goes.

Whatever you choose, keep the two tools separate in your head, with gift cards for presents and store credit for customers you already have. Your accounting, your support inbox and your customers will all find it easier.

Frequently asked questions