PayPal Gets Into Price Matching Act

Discussion
Nov 06, 2012

We’ve seen Best Buy, Target and others step up to offer consumers the assurance that they will match legitimate prices from Amazon.com and other competitors heading into the holiday season. Now comes word that a non-retailer, PayPal, is planning to do the same.

According to PayPal’s blog, consumers who use the payment service to purchase items between Nov. 1 and Dec. 31 will receive money back if they find the same product sold for less within 30 days of the initial transaction. The deal is good for products bought both online or in stores. PayPal is limiting price matching up to $250 on individual items with a $1,000 maximum.

PayPal is also offering free shipping to consumers who use the service and buy from merchants who accept returns but don’t cover the postage. The company will send consumers a pre-paid shipping label within five days after filing a claim or refund the return shipping charges to those who sent an item back by themselves. There is a $100 limit for the holiday period with a maximum of $25 per item.

PayPal, which is accepted at a large number of retailers both large and small, claims to have more than 50 million users in the U.S. and 117 million worldwide.

Will PayPal’s price matching and free merchandise return offers result in greater use of the payment service by consumers this holiday season? Do you see these types of promotional tactics as necessary for payment services to stimulate consumer adoption and loyalty?

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8 Comments on "PayPal Gets Into Price Matching Act"

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Liz Crawford
BrainTrust

Smart Move! I love it! PayPal has outmaneuvered even savvy ol’ Amex. Sure, shoppers are bound to take advantage of this – why not? PayPal is increasingly POS agnostic (bricks and mortar, online, mobile, etc). Look for others to be fast-followers on this.

Paula Rosenblum
BrainTrust

Oh, this is all about a land grab in advance of the explosion of multiple mobile payment types next year. ISIS is out, MCX is coming…I think PayPal is using the promotion this season as a loss leader, basically. It’s a very clever idea.

Max Goldberg
BrainTrust

This is a great, but potentially expensive holiday sales gimmick. PayPal wants a seat at the table with the big credit card companies. This campaign will bring them publicity and sales.

Too often PayPal is considered only when other means of payment are not readily available. The service seems stale when compared to Google Wallet and other electronic payment alternatives.

Good move by PayPal. I hope it doesn’t cost them too much money.

Sandra Gudat
Guest
Sandra Gudat
4 years 11 months ago

I think it’s a brilliant move on PayPal’s part and will absolutely spur adoption and loyalty. I wonder as they developed the business case for this strategy whether their objectives were more focused on new customer adoption vs. usage by existing customers — probably a combination of both. Will be curious to see if they do this again in 2013.

Gene Hoffman
Guest
Gene Hoffman
4 years 11 months ago

PayPal is doing what it has to do stay in the game: being competitive with a price matching service and return policy that may not even be necessary today.

Loyalty is the one thing a company cannot do without. PayPal, or so it might seem, is hoping that its latest marketing song will receive more applause and loyalty from the consumer audience than other similar price-matching music being played for holiday selling. And thus we wish PayPal “good luck.”

Ken Lonyai
BrainTrust

I stand firmly behind the belief that most medium and large retailers are moving to free shipping both ways within the next 5 years max (possibly 2). Price matching will probably be less sustainable and less widespread.

PayPal’s move is just an indicator of these trends with likely little real benefit for them. They’re pretty well known as it is, yet they are also not particularly known to be that consumer friendly, especially with merchant disputes. So there may be wariness on the part of consumers to trust PayPal as the intermediary in this situation.

gordon arnold
Guest

It seems to be an attempt to move in on the market shares of Amex, MC, Visa and others, more than a service to the consumer. No more than simply buying the business you want away from the competition.

Lee Kent
BrainTrust

I see this as a great move by PayPal. I too see it as potentially expensive for their seat at the table. The thought that came to my mind was…I often buy an item off of eBay at a higher price because of the ranking of the vendor. Still a good price and one I’m willing to pay. Now, can I turn around and take advantage of the price matching while still receiving the item from my preferred vendor? Hmmm

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