PayPal Canada Makes Shopping a Little Easier with Shipping Credits

A recent commercial for UPS introduced us to Zoe, a young lady on the hunt for a prom dress as so many young ladies are this time of year.

The resources of the Internet lay before her, and as she hunted for that perfect dress, she went through a lot of possibilities…and a lot of returns.

For some retailers, that would have meant an even bigger expense as the buyer is charged for returns. PayPal Canada, however, is making things easier for Zoes throughout Canada, as it moves to offer return shipping credits and absorb some of that cost itself.

This was not an easy decision for PayPal, as either posture would represent costs in one way or another.

Thanks to its new program, Return Shipping on Us, PayPal has moved to take a lot of the risk that’s left out of online shopping, and allowing its customers to make returns at no charge to the customer.

That will be a big expense on PayPal’s balance sheet, but the alternative may have been worse.

As noted by PayPal Canada’s head of consumer marketing, Kerry Reynolds, ecommerce in Canada is set to grow in 2016 by fully eight percent, hitting $34.5 billion.

If PayPal wants any substantial cut of that hike, it’s going to have to look more attractive to its user base, and swallowing return expenses could be just the ticket.

With consumers now no longer bound by worries about who’s paying for returns, there’s more incentive to—just like Zoe—shop and return and shop again until just the right item is had.

That kind of reassurance is likely to drive PayPal use, enough to more than wipe out the extra costs incurred by covering returns.

Throw in the extra support for cross-border shopping—as Canadians shop with United States firms and vice versa—and that’s an extra plum in an already sweet pudding, so to speak.

It may not balance out at first, but PayPal Canada’s plans to take over some of the risk from consumers is likely to, at least eventually, mean profit for the payment processor.