In its second-largest acquisition, Amazon buys the company for $970 million.
They’ll refund the differences when competitors offer lower prices.
No one wants to be Scrooge in this year’s holiday shopping season, particularly not PayPal, Newegg.com Inc. or other retailers who have promised to match the prices of competitors—in PayPal’s case, covering even airline tickets.
PayPal, the online payments service of eBay Inc., is offering to match prices for purchases made through PayPal’s checkout service between Nov. 1 and Dec. 31. The offer is good for 30 days after the transaction for most items, and up to seven days for airline tickets. The program covers price differences only for tickets sold through a single airline.
The offer, part of a broader program that includes free shipping on returned items and special financing terms on purchases of $99 or more, complements PayPal’s efforts to encourage consumers to use its payment service in stores as well as online or through mobile devices. “It doesn’t matter if you bought the item online, in a store or from eBay’s top-rated sellers using ‘Buy It Now,’” wrote Claudia Lombana, a PayPal shopping specialist, yesterday on a PayPal blog. She also encouraged readers to try paying with PayPal when shopping in the bricks-and-mortar stores of retail chains that accept PayPal, which include The Home Depot, Abercrombie & Fitch and Jos. A Bank.
PayPal has limited its price-matching offer to cover a maximum of $250 per item and $1,000 in total for the holiday promotion. It excludes certain products, including live plants, jewelry, antiques and automobiles.
Citibank is offering similar terms in a price-matching program on purchases made with a Citibank credit card, though it doesn’t cover airline tickets.
Jim Okamura, managing partner of retail consultancy Okamura Consulting, says the scope of the PayPal program underscores the payment company’s efforts to grow its business across online and offline retail channels. “I would call this unprecedented,” he says. “For a payments company to put its money behind this, it shows how aggressive it is to build its market share.”
Meanwhile, online computer products retailer Newegg yesterday launched its Iron Egg Guarantee Program, which offers to match prices from a select group of retailers, including Amazon.com, Buy.com, BestBuy.com and Crutchfield.com, on certain items purchased at Newegg.com between Nov. 1 and Dec. 24. Newegg is also offering free shipping and an extended return period on the same products.
Both the PayPal and Newegg price-matching programs require customers to fill out a form providing information about a competitor’s lower price to request a refund to cover the price difference. Sucharita Mulpuru, principal analyst for e-business at Forrester Research Inc., says the chore of filling out such forms may result in few consumers actually taking advantage of them.
“I don't know how much it really affects consumer shopping behavior as it's such a pain to get these price matches actually refunded,” she says. Nonetheless, she adds, “It may encourage some people to use one particular payment form over another in certain high-ticket purchases.”
Newegg is No. 13 in the Internet Retailer Top 500 Guide; Amazon is No. 1; Best Buy, No. 11; Buy.com, No. 36, and Crutchfield, No. 123.