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Credit vs Cash Payouts

When completing a trade-in, you'll choose how to pay the customer: cash or store credit. Each method has distinct benefits and considerations for your business.

Payment Methods Overview​

Cash Payouts​

  • Pay the customer immediately from your cash drawer
  • Customer receives money they can spend anywhere
  • Requires maintaining adequate cash on hand
  • Higher cost to your business

Store Credit Payouts​

  • Add value to the customer's BookWish account
  • Customer can use credit for future purchases at your store
  • No immediate cash handling required
  • Often includes a bonus percentage
  • Encourages repeat business

Store Credit System​

How Store Credit Works​

When you select Store Credit to complete a trade-in:

  1. The customer must have a BookWish account (or create one)
  2. The trade-in value is added to their store credit balance
  3. Credit is specific to your store only
  4. Customer can view their balance in the app
  5. Credit is automatically applied at checkout

Credit Balance Tracking​

Store credit is tracked per customer, per store:

  • Each customer has a separate balance for each store
  • Balances carry forward indefinitely (no expiration)
  • Transaction history is maintained
  • Staff can view customer credit balances at any time

Using Store Credit​

Customers can redeem their store credit:

  • In-store purchases - Applied at POS during checkout
  • Online orders - Applied when ordering through your store's website
  • Partial redemption - Use some credit and pay remainder in cash/card

Note: Store credit cannot be transferred between stores or converted back to cash.

Offering Credit Bonuses​

Many stores offer a bonus when customers choose store credit over cash. This is a smart business practice for several reasons:

Why Offer Bonuses?​

1. Encourages Loyalty

  • Customers return to your store to spend credit
  • Creates repeat visits and relationship building
  • Reduces price-shopping at competitors

2. Improves Cash Flow

  • Delays actual cash outlay
  • Credit may be redeemed slowly over time
  • Some credit may never be fully redeemed

3. Increases Transaction Value

  • Customers often spend more than their credit balance
  • Higher average order value when redeeming credit
  • Opportunity for additional sales

4. Cost-Effective

  • Even with a 20% bonus, you're paying less than retail margins
  • Customer spends at full retail price
  • Net margin on redemption is still profitable

Common Bonus Structures​

Percentage Bonus

  • Example: 20% extra for store credit
  • $20 cash trade-in = $24 store credit
  • Clear and easy to communicate

Tiered Bonuses

  • Example: 15% up to $50, 20% over $50
  • Encourages larger trade-ins
  • Rewards high-value customers

Promotional Bonuses

  • Special events or slow periods
  • Example: "25% bonus this weekend only"
  • Drives traffic during specific times

Setting Your Bonus Rate​

Consider these factors:

Your Margins

  • Typical retail markup on used books
  • How much room you have to offer bonuses
  • Break-even point on trade-in costs

Competition

  • What other local stores offer
  • Online trade-in competitor bonuses
  • What's standard in your market

Customer Base

  • How much credit encourages return visits
  • Average redemption time
  • Customer preferences and feedback

Typical Range: Most bookstores offer 10-25% credit bonuses.

Cash Payouts​

When Cash Makes Sense​

Some customers prefer or need cash:

  • Don't plan to shop at your store again
  • Need immediate funds
  • Traveling or just passing through
  • Prefer flexibility

Cash Drawer Management​

When offering cash payouts:

Maintain Adequate Cash

  • Keep enough bills for typical trade-ins
  • Replenish from daily sales
  • Plan for busy trade-in periods

Count Carefully

  • Verify amount before handing over
  • Have customer confirm the amount
  • Record large cash transactions

Security Considerations

  • Don't keep excessive cash in drawer
  • Make bank deposits regularly
  • Follow your security protocols

Record Keeping

  • Track daily cash payouts
  • Reconcile against trade-in records
  • Include in daily cash count

Cash Flow Impact​

Cash payouts affect your business differently:

Immediate Cost

  • Money leaves your drawer right away
  • Reduces available cash for operations
  • Need to balance against daily sales

No Future Obligation

  • Transaction is complete
  • No outstanding credit liability
  • Simpler accounting

Lower Total Cost

  • No bonus paid
  • Total payout is less than credit option

Implementing Your Policy​

Clear Communication​

Make sure customers understand their options:

At Start of Trade-In

  • "We offer cash or store credit with a 20% bonus"
  • Post signage at counter
  • Include policy on website

Before Completing

  • Confirm customer's preference
  • Show both amounts clearly
  • Explain credit usage

In Marketing

  • Promote credit bonuses
  • Highlight benefits in signage
  • Mention on social media

Handling Special Cases​

Customer Has No Account

  • Offer to create account quickly
  • Explain benefits of having account
  • Fall back to cash if they prefer

Customer Wants to Use Credit Immediately

  • Complete trade-in for credit
  • Immediately start a purchase transaction
  • Apply credit to their purchase

Large Trade-Ins

  • Consider limits on cash payouts (e.g., $100 max)
  • Encourage credit for large amounts
  • Split payment if needed (part cash, part credit)

Store Credit Best Practices​

Encourage Credit Redemption​

Follow Up

  • Send reminders about credit balance
  • Notify of new inventory they might like
  • Include balance in receipts or emails

Make It Easy

  • Train staff to check balances quickly
  • Display balance during transactions
  • Allow partial credit redemption

Promote Usage

  • "Use your $X credit today!"
  • Special events for credit holders
  • Combine with other promotions

Track Credit Liability​

Monitor outstanding store credit:

  • Total credit issued vs. redeemed
  • Average redemption timeframe
  • Credit balances by customer

This helps you:

  • Understand actual cost of bonuses
  • Manage cash flow expectations
  • Identify inactive credit

Frequently Asked Questions​

Can customers choose part cash and part credit?​

The BookWish system currently requires choosing one method per trade-in. However, you could theoretically process two separate smaller trade-ins if needed.

What happens if a customer never uses their credit?​

Store credit doesn't expire, so the liability remains on your books. However, unredeemed credit is a profit opportunity, similar to unused gift cards.

Can I change my credit bonus percentage?​

Yes, you can adjust your bonus policy at any time. Just make sure to communicate changes clearly to customers and be consistent in applying the current rate.

What if I don't want to offer cash payouts?​

You can choose to offer store credit only. Many bookstores operate this way successfully. Just be clear about the policy upfront.

How do I handle credit for customers who move away?​

Credit remains in their account. They could use it if they visit again, order online (if you offer shipping), or you could consider a one-time conversion to cash at their request (your discretion).

Should I offer the same bonus year-round?​

Most stores keep a consistent bonus rate, but you can run special promotions (higher bonuses) during slow periods or to drive traffic.

What's better for my business: cash or credit?​

Store credit is generally better for:

  • Customer loyalty
  • Overall profitability
  • Cash flow management

But offering both options maximizes the number of trade-ins you can accept.