PayPal offers reimbursement for online returns to Canadian consumers

PayPal offers reimbursement for online returns to Canadian consumers

The Return Shipping on Us program aims to boost online sales via PayPal, which has more than 6 million customers in Canada.

In a push to increase online shopping in Canada, PayPal Holdinss Inc. is offering its Return Shipping on Us program to Canadian consumers, allowing them to return online purchases and receive reimbursement from PayPal for the cost.

A survey of Canadian consumers in April found that 40% worry about ordering the wrong item online and not being able to return it, according to a study from research company Ipsos that surveyed 1,007 Canadians online. 27% of Canadians surveyed say they have paid returns shipping costs in the past year, and among those who have done so, 65% say it cost more than $10 each time, the study says.

“Canadian e-commerce is expected to grow by 8% in 2016 to $34.5 billion,” says Kerry Reynolds, head of consumer marketing, PayPal Canada. “With online retail competition heating up locally and internationally for Canadian businesses, Return Shipping on Us is a competitive differentiator. Our investment in this service is a potential revenue driver for smaller online sellers who can’t afford to offer free returns to their customers.”

PayPal has 184 million active customers, defined as those who have sent or received at least one payment or payment reversal in the past 12 months. Of those 184 million globally, 6.4 million (3.5%) are in Canada, PayPal says.

The returns program also applies to online purchases from international e-commerce sites. 10.7 million Canadians engage in cross-border online shopping, and 38% says free return shipping would make them more likely to buy online from another country, according to PayPal’s Cross-Border Consumer Research 2015. Among Canadians who shop from international websites, 25% mentioned that return shipping costs hold them back, while that jumps to about 40% among Canadians who do not buy from international sites, the report states.

PayPal account owners in Canada are eligible for up to 10 refunds on return shipping costs per calendar year, up to $30 Canadian (US$ 23) per claim. The process works like this: Customers, who register with PayPal for the returns program, return the item directly to the seller following the retailer’s instructions, keeping a copy of the return shipping receipt. The customer then submits a refund request via PayPal’s claim portal, adding the purchase and return shipping receipts to the online form before submitting it. A refund of up to $30 will appear in the customer’s PayPal balance within 10 days for approved claims.

PayPal, which absorbs the cost of the returns shipping, offers the returns program in more than 40 countries. In the United States, the offer applies to eligible purchases made with PayPal on or after Feb. 1. PayPal in October started offering the service in the U.S., its largest market, targeting holiday shoppers for purchases made Oct. 13-Jan. 31. PayPal will not disclose how much it has spent on shipping or how many returns it has processed, but millions of PayPal customers have signed up for the returns program, a spokeswoman says.