Store credit may refer to a branded credit card or store credit card account. It more often is used to refer to a situation where a customer has a credit balance with a particular merchant, often due to a return or a gift card. For example, imagine you purchase $500 worth of merchandise from a store and later return the merchandise. The store might not offer a refund but instead offers a $500 store credit.
This credit can be used in the future when purchasing merchandise from the same store or, sometimes, from the same merchant. Merchants often hold a "returns for store credit only" policy to ensure that any funds spent at the store remain spent at the store, even if the merchandise purchased is later changed via return.