Customizing Payment Options for First-Time vs. Returning Customers

Specialty food subscription services face a unique opportunity when it comes to payment options: the ideal checkout experience differs significantly between first-time and returning customers. New customers often prefer trusted third-party payment methods like PayPal that don't require storing payment information on a new site, while returning customers benefit from quick checkout using their previously saved payment methods.

The solution is to dynamically adjust payment option priority based on the customer's order history. Standard Shopify checkout settings don't support customer history-based payment prioritization, but with the Sway Functions Generator, you can create sophisticated payment functions that detect first-time versus returning customers and prioritize the most appropriate payment options for each.

The Business Case for Customer History-Based Payment Options

Step-by-Step Implementation

1. Access the Payment Functions Section

1. From your Shopify admin, open the Sway Functions Generator app
2. Click on "Functions" in the main navigation
3. Select the "Payment" tab

2. Create a New Payment Function for First-Time Customers

1. Click "Create function"
2. From the modal, select "Reorder Payment Gateways"
3. You'll be taken to the function editor

3. Configure Basic Settings

1. Enter a descriptive campaign name (e.g., "First-Time Customer Payment Priorities")
2. Set the function status to "Active"

4. Define First-Time Customer Condition

This is where you'll specify how to identify new customers:

1. Under "Customer Qualifier," select "Order Count"
2. Choose the condition "equals"
3. Enter "0" as the value
4. This ensures the function only applies to customers with no previous orders

5. Configure Payment Gateway Prioritization for New Customers

Now define which payment options should be prioritized for first-time customers:

1. Under "Payment Gateway Actions," select "Reorder Gateways"
2. Choose "Gateway Name Contains"
3. Enter trusted third-party options to prioritize (e.g., "PayPal", "Apple Pay", "Google Pay")
4. Set "Move to Position" to "1" (top position)
5. This ensures trusted payment options appear first for new customers

6. Create a Second Function for Returning Customers

1. Create a new payment function
2. Name it "Returning Customer Payment Priorities"
3. Under "Customer Qualifier," select "Order Count"
4. Choose the condition "greater than"
5. Enter "0" as the value
6. Under "Payment Gateway Actions," configure to prioritize saved payment methods
7. For example, prioritize "Shop Pay", "Saved Cards", and "Subscription Payment Method"

7. Save and Test

1. Save both functions
2. Test thoroughly with both new and returning customer accounts

Advanced Configuration Options

Subscription-Specific Priorities

For specialized subscription payment handling:

1. Add cart attribute qualifiers to detect subscription products
2. Create separate functions for subscription versus one-time purchases
3. For example:
   • New customer + subscription: Emphasize subscription-friendly payment methods
   • New customer + one-time: Emphasize trusted third-party options
   • Returning customer + subscription: Emphasize saved subscription methods
   • Returning customer + one-time: Emphasize quick saved payment methods

Loyalty-Based Payment Prioritization

For enhanced options for loyal customers:

1. Create more granular customer segments based on order count
2. For example:
   • First order: Trusted third-party options
   • 2-5 orders: Saved payment methods + loyalty options
   • 6+ orders: VIP payment options + exclusive benefits
3. Set appropriate priority levels for each customer segment function

Fraud Risk Mitigation

For enhanced security with new customers:

1. Add additional qualifying conditions for high-risk scenarios
2. For example, for new customers + high-value orders + international shipping:
   • Prioritize payment methods with strong fraud protection
   • Deprioritize or hide higher-risk payment options
   • Add special verification for certain payment methods

Implementation Example: Food Subscription Service

Here's a real-world example from a specialty food subscription service:

1. First-Time Customer Experience:

   • Payment option priority:
     1. PayPal (prominently displayed with "Shop confidently" messaging)
     2. Apple Pay / Google Pay (with "Quick checkout, no account required" messaging)
     3. Credit/Debit Card (with enhanced security indicators)
     4. Shop Pay (with "Save for faster checkout next time" messaging)
   • Special messaging: "First time? Checkout securely with your preferred payment method"

2. Returning Customer Experience:

   • Payment option priority:
     1. Previously Used Payment Method (with "Use again" badge)
     2. Shop Pay (with "1-Click Checkout" messaging)
     3. Saved Credit/Debit Cards
     4. PayPal
     5. Other payment options
   • Special messaging: "Welcome back! Use your saved payment method for faster checkout"

3. Subscription Customer Experience:

   • Payment option priority:
     1. Subscription Payment Method (if already subscribed)
     2. Credit/Debit Card (with "Secure for recurring payments" messaging)
     3. PayPal
     4. Other payment options
   • Special messaging: "Select a reliable payment method for your subscription"

Merchandising Your Customer-Specific Payment Approach

To maximize the effectiveness of your customer-specific payment priorities:

1. Add Contextual Messaging - Include appropriate payment guidance based on customer status
2. Create Trust Indicators - Use security badges and messaging for new customers
3. Highlight Convenience for Returns - Emphasize speed and simplicity for returning customers
4. Develop Subscription-Specific Guidance - Provide clear information about recurring payment handling
5. Use Account Dashboards - Allow customers to manage their preferred payment methods

Real Results: Food Subscription Service Case Study

A specialty food subscription service implemented customer history-based payment prioritization with these results:

• 34% increase in first-time purchase conversion rate
• 28% reduction in checkout abandonment for new customers
• 42% faster average checkout time for returning customers
• 18% higher subscription renewal rate
• 26% increase in average customer lifetime value

Measuring Success

To evaluate the effectiveness of your customer-specific payment priority strategy, monitor these metrics:

• First Purchase Conversion Rate - Are more new visitors completing purchases?
• Returning Customer Checkout Time - Is the checkout process faster for repeat buyers?
• Payment Method Distribution - Which methods are being selected by different customer segments?
• Cart Abandonment by Customer Type - Are fewer customers abandoning during payment selection?
• Subscription Continuity - Are payment issues affecting fewer subscription renewals?

Common Issues and Solutions

| Issue | Solution | |-------|----------| | New customers still hesitant despite trusted options | Add enhanced trust signals and security messaging | | Returning customers not using saved methods | Improve the visibility and benefits of saved payment options | | Payment gateway identification challenges | Consult with payment providers for exact gateway identifiers | | Subscription payment failures | Implement enhanced retry and card update workflows |

Next Steps

Ready to implement customer history-based payment prioritization for your subscription service? Start by:

1. Analyzing your current payment method distribution across customer segments
2. Identifying which payment methods perform best for new versus returning customers
3. Designing appropriate messaging for each customer segment
4. Creating your payment gateway priority functions
5. Testing thoroughly with different customer scenarios

For personalized assistance with your customer journey payment strategy, book a consultation with our team.