The Benefits and Drawbacks of Allowing Guest Checkouts

The Benefits and Drawbacks of Allowing Guest Checkouts

October 15, 2021 Off By Koehler Home Decor

When it comes to user registration in online retail, there are two schools of thought because there are two possibilities.

The first option is to limit your site to solely user accounts. Anyone who wants to purchase something from your store must first create an account. Another option is to let guests check out without saving their information to a user account or your website in any way.

One school of thought believes that allowing visitor checkouts is preferable, while another believes that confining it to only user accounts is preferable. Each of the arguments have merit, so we’ll go over both of them.

We’ll look at this from the perspective of “the benefits and drawbacks of allowing guest checkouts.” Let’s get started!

The Benefits of Allowing Guest Checkouts

  1. Allowing guest checkouts is a lower barrier to purchase. Marketers often talk about the “barrier to entry” that prevents people from taking action. This is a familiar concept in a lot of different industries. The harder it is for someone to accomplish a task, the more motivated they have to be to accomplish it, and the fewer people are going to do it. Many customers will make purchases that they would not have made if they had to register an account if guest checkouts are available.
  1. When there isn’t another obstacle in the way, people are less likely to abandon their carts. This is a natural progression from the preceding pro. Allowing guest checkouts has been demonstrated time and time again to be one of the most effective strategies to eliminate abandoned shopping carts in your store. People frequently add products to their carts, only to abandon them when they learn they need to create an account in order to complete the transaction.
  2. Further sales are encouraged by a lesser level of commitment. In today’s culture of instant gratification, commitment is a difficult sell. Many customers do not want to have to jump through hoops in order to get what they want from your store. They’ll go where it’s most convenient, even if it means paying a bit more for the convenience.
  3. More options generally mean more conversions. Now, this doesn’t hold true in every situation. Decision paralysis is a real thing, after all. If you were to give a user 10 different options for checking out, then you’d probably lose conversions from people who don’t want to have to decide. Simply allowing the choice between creating an account and not doing so is easy, though.
  4. Many people are just tired of having to create accounts everywhere. We live in a world where it seems like there’s a major data breach every few months, and even our web browsers are starting to notify us when saved passwords have been hacked. A lot of people would simply rather you not even have their information stored anywhere so that if your website suffers an intrusion, their information isn’t at risk.

The Drawbacks of Allowing Guest Checkouts

  1. You won’t be able to harvest information to customize marketing. You know how, when you shop at a store, you later get an email talking about deals they have for you, and they offer you things relevant to the purchases you made, and they mention you by name, so it feels more personal? You can’t do that if you don’t have information about the user who makes a purchase.
  2. You won’t be able to quickly contact abandoned carts. You can still utilize Google Analytics and the Facebook Tracking Pixel to run remarketing advertisements afterwards, but they won’t be highly tailored. You’ll be able to target the generic “those who shopped at my store” audience, but you won’t be able to modify it based on any other information.
  3. It’s harder to tell when a customer is a returning customer. Guest checkouts mean you don’t really get to save much information. You can do some basic IP address tracking, and you can cross-check that with user agents and so on, so you can record some information, but there are some users who find that a little creepy and might shy away from your store wondering what else you’re tracking.
  4. You’ll have lower enrollment for loyalty programs. If you’re trying to run any kind of loyalty or rewards program, people who don’t sign up for accounts won’t be able to enroll for rewards. Not everyone wants to run a loyalty program, of course, so this con isn’t a con for everyone, but if you want to get a program up and running, guest accounts will get in the way.
  5. You won’t be able to save order history. This can be a big one for some types of users. Some people want to be able to recover their order history, but if they checked out as a guest, you won’t have information to give them. It’s a bit of a customer service issue, here.

To Allow Guest Checkouts or Not?

We’re afraid we can’t tell you which choice is the best because it depends on the type of business.

You’ll be able to get away with demanding a user account far more readily if your brand has a lot of trust, social proof, and name recognition. People are cautious to set up accounts with stores they don’t trust or recognize, but if you have a name that people in your niche are familiar with, they will.

Accounts can be useful if you have a lot of repeat customers. Allowing guest checkout will be more beneficial if your store sells long-lasting products and you don’t have customers returning every few months or on an annual basis.

The more incentives you provide for users who have accounts, the easier it will be to persuade them to use them. They’ll be more likely to sign up for an account if they’re automatically sent coupons, discounts, promotions, and newsletter notifications, for example. They’re less likely to want an account if it only allows you to store information about them and promote to them with little advantage to them.

To lure signups, most stores will gain from having as many options as possible, with the most desirable one – the account – being more beneficial. You should avoid decision paralysis unless you’re offering 50 distinct account signup options, in which case it’ll be a straightforward issue of time and convenience vs the benefits of registering an account.

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