EcommerceBytes-Update, Number 121 - June 20, 2004 - ISSN 1528-6703     6 of 10

eBay e-Loyalty Programs: Encouraging Repeat Sales

By Nancy L. Hix

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The support beam of successful business is a solid customer base. Sellers facing the fierce competition at eBay know that repeat business isn't always a given. To coax that second sale, auction sellers can now offer incentives that work much like the stamps our parents and grandparents glued into booklets from the grocery store. The trading stamp of the e-Commerce era is the incentive concept provided by and Both offer powerful programs designed to thank your eBay customers for their business and invite them back again.

The MyStoreCredit program sets up a credit account for each of your buyers. The buyers can then use this credit as cash the next time they win one of your auctions or buy something from your eBay Store. When you register your account, you'll set the store credit amount based on how much the buyer originally spent with you in the first transaction. For example, if they pay $10 for the first item, you can offer $1 in store credit when they purchase a second item from you.

You have three options in how you will fulfill the credit when the buyer makes another purchase from you. You can deduct the buyer's credit amount from the buyer's invoice; you can include a rebate check in the buyer's shipment; or you can send the buyer a PayPal payment (be aware that PayPal may charge buyer a small fee to accept this payment). The first option is the default selection and requires the least amount of additional work for the seller.

MyStoreCredit will establish and administer the store credits for you. Once your account is active and the program kicks in, anyone who buys an item from you automatically receives the appropriate credit.

MyStoreCredit then encourages repeat purchases and reminds customers that they have store credit. First, the buyer receives an email inviting him or her to opt in with the MyStoreCredit service. Once your buyer accepts the invitation, MyStoreCredit emails them monthly updates for one year. The message includes your current eBay listings so the buyer knows where to redeem the accrued store credit. This is a powerful marketing tool.

Another customer incentive tool exists at The offering is a flexible program devised to reward and motivate customers who pay sellers through PayPal. PayCodes enables eCommerce merchants to issue coupons to customers for use toward future PayPal payments. After registering an account with PayCodes, the seller can create coupons with certain specifications, such as the discount amount, the expiration date, and the usage limit. PayCodes then generates a unique coupon code for each one.

To redeem a PayCodes coupon, the customer must access He or she then enters an amount due to the seller for a transaction and inputs the coupon code. PayCodes applies the discount to the transaction amount and then redirects the customer to the PayPal site to submit the net payment to the seller.

Participating PayCodes sellers have a few options for handing out coupons. Coupon codes meant only for specific customers can be emailed directly to them using the online form accessed through the seller's PayCodes account. For promotional codes offered on a limited basis as a motivation to buy, the seller can post them in auction listings, on his or her Web site, or through any other means such as newsletters, email messages, etc.

PayCodes supports multiple currencies, including U.S. Dollars, Canadian Dollars, Euro, Pounds Sterling, and Yen. PayCodes coupons expire when the seller-specified usage limit has been achieved, or when the expiration date arrives, whichever is sooner.

A comprehensive manual in PDF format available at the PayCodes site walks users through the process and answers Frequently Asked Questions. PayCodes also offers a referral affiliate program. Visit the site for account fees and affiliate program details.

E-Loyalty Programs
Just like in the offline world, coupons make sense in the online world by giving customers a reason to return to your listings.

"The possibilities created by operating a loyalty program in cyberspace are endless," says Jed Carlson, Director of Marketing for MyStoreCredit. "I think that our business, and the idea of e-Loyalty programs in general, will be growing rapidly over a very short time frame. e-Loyalty is a natural extension of a tried-and-true bricks and mortar marketing tool."

About the author:

Nancy L. Hix authored three books related to online auctions, the latest being The Business Guide to Selling Through Internet Auctions. Her articles have appeared in numerous magazines and trade journals and she has been a contributing writer for Vendio (formerly AuctionWatch) and The Online Trader's Web Alliance (OTWA).

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