PayPal's Price-Match Program Is Fishing For Your Shoppers In Your Stores

Price-match programs have, for decades, been a standard tool for retaining existing customers and potentially attracting tire-kickers by giving them a reason to not fear your pricing. But PayPal is creatively using the program to acquire new customers, and it is using its retail partners' ludicrous price-match restrictions as the path to do it.

At a glance, retailers might be inclined to dismiss this price match as something akin to what Visa, MasterCard, American Express or Diner's Club might offer and not at all related to what a retail chain might do. Although PayPal is indeed a payment device, its in-store retail efforts—where PayPal offers to handle POS purchases at Home Depot, JCPenney, Abercrombie & Fitch, Toys"R"Us, Foot Locker and Barnes & Noble, among others—make it something that can't be so easily dismissed. For the doubters out there, note that the program stresses it covers both in-store and online purchases.

From PayPal's perspective, this is a potential goldmine. The program is only slated to run from November 1 through December 31—and it does the usual exclusion of Thanksgiving, Black Friday and Cyber Monday one-day sales—so its calendar exposure is capped, but the names of new customers last forever.

Speaking of exposure limits, this program shares a lot with rebate psychology. Most customers won't bother to use the rebates, but they'll appreciate that the price protections are there. How many customers will bother to see if someone else is charging less after they've made a purchase? And to then find an ad somewhere to prove it, fill out a non-tiny form and attach the evidence? And to provide full name, address, phone number, E-mail address, full item name and description, brand, purchase price, model number, purchase date and PayPal transaction ID? And to then scan in and attach the itemized receipt, along with the copy of the ad showing the lower price. Oh, and they have only 10 days after the ad runs to file all this material. And the refund is capped at $250 per item and $1,000 total. The sale date must also be within 30 days after the purchase.

If you think this approach is a great way to get PayPal to cover the price matches of your customers, thereby relieving you of the cost, don't bother. PayPal is one step ahead of you. From its terms and conditions: "The Price-Match benefit is supplemental to, and excess of, any valid and collectible avenue of recovery which is available to you, the eligible account holder. We will refund the excess amount once all other coverage has been exhausted up to the limit of liability." And it specifically references retail price-match programs.

But PayPal added a few really nice pluses: It will cover the cost of return shipping and, the big one, there are no practical restrictions on which retailers—online or off—can be used for the price match. That is, of course, huge.

PayPal needs to give shoppers reasons to use PayPal instead of other payment options, and this is a powerful argument. And once many of your customers are using—and insisting on—PayPal, you're going to find that they suddenly have acquired a lot more clout.

PayPal's deal with Discover raises the possibility of PayPal eventually being accepted at millions of retail locations. That's going to get PayPal in the middle of your stores in a major way. This price-match deal is its way of trying to make your customers PayPal customers.