Customers wanting to return goods bought through PayPal Canada will be able to return up to 10 items a year without shipping costs, which could amount to $300 annually per person.
The company is risking a profit dent in a bid to drive more customers to use its ecommerce services, a move which is being taken up by an increasing number of online retailers, including Amazon.ca.
Kerry Reynolds, head of consumer marketing at PayPal Canada, told The Globe and Mail: “People are generally worried about shopping online because they don’t quite feel comfortable with the return process. For us, return shipping is a competitive differentiator... It’s one of those things that’s in line with our strategy of removing those barriers for people to buy online.”
Amazon’s decision to offer free returns has impelled many other rivals to do the same in a bid to keep pace with the internet powerhouse.
Data from Canada Post shows that 28 percent of the country’s top 70 ecommerce retailers provided free return shipping, with the volume of returns doubling in just two years.
Compared to the USA however, Canadian retailers are slow in the uptake of offering free returns – nearly half of America’s biggest online shopping providers already do so.
Consumer research reveals that many are put off online shopping by high return costs, fearing that they may order the wrong item by mistake and have to pay for it. Free returns for the majority of consumers contributes to the perfect shopping/aftersales experience.
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