Store Credit vs Gift Cards vs Coupons: What’s the Difference?

Coupons, gift cards and store credit all look similar at checkout. The customer enters a code or picks a balance, and the total goes down. But they each have their differences.

In short, a coupon is a discount you choose to give. Gift cards and store credit are money the customer already has with you. A gift card was bought, often as a present, and whoever has the code can spend it. Store credit is something you’ve given back to a customer, like a refund or cashback, and it stays on their account.

Mixing them up tends to cost you later. A welcome code gets shared on a deal site, or a refund goes back to the customer’s card when it could have stayed in your store. They also affect your sales and profits at different points, and gift cards have their own rules on expiry.

We make Simple Store Credit, which handles store credit and gift cards in WooCommerce, so we’ve mentioned it where it fits. Everything else here applies to whatever you use.

Store credit vs gift cards vs coupons at a glance

	Coupon	Gift card	Store credit
What it is	A discount on a purchase	Prepaid value, bought with money	Value you issue to a customer
Where it comes from	You create it for a promotion	A customer buys it, often for someone else	Refunds, cashback, goodwill, rewards
Who can use it	Anyone with the code, unless restricted	Whoever holds the code	The account holder (or an assigned voucher)
Leftover value	Usually lost if the order is smaller	Stays on the card for next time	Stays in the balance for next time
When it costs you	At the sale, as lower revenue	Paid up front, owed as goods later	When it’s spent
Expiry	Your choice	Regulated in some places	Mostly your choice, see below
In WooCommerce	Built in	Needs a plugin	Needs a plugin

What a coupon is (and when to use one)

A coupon is a promotion that nobody paid for. You’re choosing to charge less, usually to win a first order, reward a newsletter sign-up, clear stock or give an affiliate something to share.

WooCommerce has coupons built in under Marketing › Coupons, with three discount types: percentage discount, fixed cart discount and fixed product discount. You can set an expiry date, a minimum or maximum spend, usage limits overall and per customer, and restrict a coupon to certain products, categories or email addresses. WooCommerce applies coupons to product prices before tax is calculated, so a coupon lowers the taxable amount of the sale.

A coupon is also used once and then it’s gone. If someone uses a $50 fixed cart coupon on a $30 order, the other $20 doesn’t carry over to their next one. That’s fine for a promotion, but it makes coupons a poor way to hand back money you owe someone.

The other risk is leakage. A general code like WELCOME10 can end up on coupon sites within days. Per-customer usage limits and expiry dates help. If you need rules WooCommerce doesn’t have, such as new customers only or specific payment methods, our Better Coupon Restrictions plugin adds more than 25 extra conditions.

Use a coupon when: you want a discount to change what people do, like making a first purchase or adding more to the basket. Coupon codes are also how Coupon Affiliates tracks affiliate sales, since each affiliate gets their own code.

How gift cards work

A gift card is a product. Someone pays you $50 now, and the card lets whoever holds it take $50 of goods later. That person is often not the buyer, which is what makes gift cards a way to reach new customers: the recipient may never have shopped with you before.

Because the money has already been paid, a gift card behaves like cash in your store. It isn’t a discount, and any value left after an order stays on the card for next time. Most gift cards are also bearer instruments, meaning anyone with the code can spend them, so you don’t need the recipient to have an account.

Gift cards also carry more rules than the other two, especially around expiry:

• United States: under federal rules, the money on a store gift card can’t expire sooner than five years after it was issued or last loaded. Cards given out as part of a loyalty, award or promotional program are excluded from most of those rules, although their expiry date still has to be shown. Some states go further.
• United Kingdom: there’s no legal minimum expiry period. When asked in Parliament in 2020, the government said it encourages businesses that set an expiry date to allow at least two years, and to be clear about it.

This is a general summary rather than legal advice, and it was last checked in September 2026. The rules differ between countries and between US states, and they do change, so check what applies where you sell (or ask a lawyer) before you put an expiry date on gift cards.

WooCommerce doesn’t sell gift cards on its own. In Simple Store Credit you turn on Sell store credit and gift cards as catalog products, then set a product’s type to Store credit / gift card. The buyer can pick their own amount, choose from set amounts like $25, $50 and $100, or pay one price for a larger credit value (charge $90, give $100). The credit is delivered either to the buyer’s account balance or as a voucher code, and with PRO a buyer can send it to someone else by email with a personal message.

Gift cards make sense when a customer wants to give your store as a present. They also work as a prepaid product that brings in people who haven’t bought from you yet.

What store credit is

Store credit is value you put on a specific customer’s account. Most of the time it comes from you rather than from a purchase: a refund paid as credit instead of back to the card, cashback on an order, a goodwill gesture after a late delivery, or loyalty points turned into money.

The customer sees their balance under My Account and can spend it over one order or several. It belongs to them rather than to whoever has a code, so they need to be logged in to use it.

In practice many stores use both forms. In Simple Store Credit, a customer’s account balance is a single running total tied to their account, while a credit voucher is a code with a balance that can be part-spent. A voucher can be locked to one customer’s email, or left unassigned so anyone can use it, which is how the plugin’s gift cards work. The free version covers both, along with refunds to credit.

If you use store credit for refunds, make it an option rather than the only choice. In the UK, when a customer is owed a refund by law and paid with money, the Consumer Rights Act notes say the trader can’t swap that for vouchers or credit. For goodwill returns outside those rights, credit instead of a refund is normally up to you and your returns policy.

Store credit is the one to reach for when you’re giving value back to someone who has already bought from you, for example through a refund or cashback, and you’d like that money spent with you again.

How each one works at checkout

A WooCommerce coupon is a discount on the products, taken off before tax. Gift cards and store credit are money the customer already has with you, so plugins handle them in one of two ways. Some apply the balance at checkout much like a coupon, which lets the customer spend part of it and pay the rest by card. Others add it as a payment method, which has to cover the whole order. Simple Store Credit offers both: a redemption tool for part-payments, and an optional Store Credit payment method for customers whose balance covers everything.

Stacking matters too. WooCommerce’s Individual use only setting stops a coupon being combined with other coupons, so check how it interacts with any credit or gift card plugin you add. Test an order that uses a promotion and a balance together before you rely on it.

Tax and accounting differences

This is where the three split apart the most. Treat what follows as a general outline and check the details with your accountant. In broad terms:

• Coupons reduce the price of the sale, so you record less revenue.
• Gift cards are paid for up front but not earned until they’re spent, so an unspent card is usually recorded as a liability. As one revenue accounting guide puts it, revenue isn’t recognized until the card is used.
• Store credit from a refund is often treated as a reduction of the original sale, while credit you hand out as a reward is closer to a promotional cost.

UK sellers also have VAT to think about. HMRC’s VAT Notice 700/7 splits face-value vouchers into single-purpose vouchers, where VAT is due when the voucher is sold, and multi-purpose vouchers, where it’s due when the voucher is spent. Discount vouchers that just take money off a future purchase are left out of those rules and handled separately. A gift card for a store that sells goods at different VAT rates will often be multi-purpose, but check your own case.

Whichever you use, keep a record of how much gift card and store credit value is still unspent. It’s money you owe, and reports showing credit issued against credit redeemed make that easy to hand to an accountant.

Which one should you use?

Most stores end up using all three for different jobs:

• A customer returns something: offer store credit alongside a normal refund. If they take the credit, the money stays with you.
• Someone wants to buy a present: sell a gift card.
• You want a first order from a new visitor: use a coupon, ideally one that can only be used once per customer.
• You want existing customers to come back: store credit through cashback or rewards works better than a discount code, because it’s already theirs and only costs you when they return.
• A delivery went wrong: a small amount of store credit is a quick apology that doesn’t touch your payment provider.

Coupons are already in WooCommerce. For store credit and gift cards you’ll need a plugin, and we compared the main options in our roundup of the best WooCommerce store credit and wallet plugins.

FAQ

Is a gift card the same as store credit?

Not quite. A gift card is bought with money and can usually be spent by anyone who has the code. Store credit is issued by the store to a specific customer, for example as a refund or reward, and is tied to their account. Some plugins, including ours, deliver gift cards as a voucher or as account credit, so the line can blur in practice.

Can I use a WooCommerce coupon as store credit?

You can make a fixed cart coupon for the amount you owe, and plenty of stores do. The problems are that any value not used on the next order is lost, and there’s no balance for the customer to check. A store credit plugin fixes both by keeping the remaining balance for later.

Do gift cards expire?

It depends where you sell. In the US, store gift cards generally can’t expire within five years. In the UK there’s no legal minimum, though the government has encouraged at least two years. Other countries have their own rules, so check before setting an expiry.

Can customers use a coupon and store credit on the same order?

Often, yes, but it depends on your coupon settings and your plugin. Coupons marked “individual use only” won’t combine with other coupons. In Simple Store Credit, customers can use their account balance and a credit voucher together on one order.

Which is better for customer loyalty?

Store credit, in most cases. A coupon gives a discount to anyone who finds the code. Store credit sits in a returning customer’s account with their name on it, and they have to come back to your store to spend it.

The short version

A coupon is a discount. Gift cards and store credit are money the customer already has with you, and the only real question between them is whether someone paid for it or you gave it to them. WooCommerce handles coupons on its own, and a plugin like Simple Store Credit takes care of the other two.