PayPal Ups Ante in Holiday Season Price-Matching Wars

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Aidan Crawley / Bloomberg via Getty Images

The battle for holiday shopper dollars continues with the launch of the most impressive-sounding price-matching policy offered yet. As it turns out, the policy isn’t being offered by a retailer, but the payment processor PayPal.

Recently, Target and Best Buy both announced they’d be matching prices with online competitors such as Amazon for the first time ever this holiday season. Retailers such as Home Depot, Walmart, and Staples also have more traditional price-matching guarantees, though stores will usually only match prices displayed in competitor ads, not on websites.

For all the ins and outs of these policies, check out the comprehensive study put together by Consumer World, which lists each retailer’s exclusions and other fine print.

(MORE: By Matching Online Prices, Are Best Buy and Target Doing Exactly What Amazon Wants?)

On the very same day Consumer World released its report, however, Paypal announced its own price-matching policy, spelled out in a blog post here:

Never miss a deal with Price Matching: Know you’re getting the best deal; pay with PayPal and get the lowest price using our Price Matching offer. If the item you purchase is advertised for lower with any merchant within 30 days of purchase, you can receive a reimbursement for the difference. It doesn’t matter if you bought the item online, in a store or a new item from eBay’s Top-rated sellers using “Buy It Now”. And get this – even airline tickets from the same carrier that drop in price within seven days of your purchase are eligible for price match! Price Matching is limited to up to a $1,000 maximum throughout the promotional period and $250 per eligible item.

The policy is in effect now through December 31. PayPal’s FAQ section about price matching shows that there are some exclusions. For instance, “Items purchased on Thanksgiving, Black Friday or Cyber Monday, or advertised for sale only on these specific dates” aren’t eligible. But it appears as if PayPal’s policy is more comprehensive and generous than those of Best Buy or Target.

(MORE: Why Holiday Season ‘Self-Gifting’ Is Such a Huge Trend)

For one thing, Best Buy won’t match prices for a longer period, from the Sunday before Thanksgiving through Cyber Monday. Best Buy and Target both say they’ll only match prices from specific online retailers, such as and Price matching from PayPal, on the other hand, is far wider in scope, with an agreement to reimburse the price difference at most merchants that sell identical products.

PayPal’s price-matching policy—and those of major retailers—gives shoppers opportunities to save some money on holiday gifts, and should help people avoid making regretful, unnecessarily pricey purchases. But is this how price-matching policies function in the real world?

One reason that virtually every major hotel company has a price-matching guarantee is because company executives know that, for the most part, once a customer has agreed to pay a certain price for something, they’re done shopping around. It’s just human nature: Once a decision is made, it’s time to shift one’s mental energy to the next project, not continue dwelling on something considered a done deal. This is the case for hotel room reservations, airline tickets, and gifts meant to go under the Christmas tree alike. After hunting and finding something that you like, few want to keep on hunting, and understandably so.

But it’s necessary to stay on the hunt if one expects to get anything out of PayPal’s price-matching guarantee. Instead of saving consumers money, what price-matching policies may instead do is give shoppers a false sense of comfort, leading them to believe that any store that offers such a policy is going to cut to the chase and always offer goods at the lowest price on the market. This isn’t how things work, though. Retailer prices tend to be roughly on par with their competitors, but sometimes their prices are higher and sometimes they’re lower than their rivals.

(MORE: Former Extreme Couponer Admits: It’s a Waste of Time)

The moral is: Price-matching or no price-matching, it’s necessary to stay on your toes if you want to avoid overpaying. You must shop around before making a purchase, and also shop around after making a purchase. Does that sound like a hassle? Indeed, it is—and retailers are banking on it being so.

When PayPal introduced its price-matching policy, it also announced two other promotions for the holidays: free shipping on returns and more time to pay for items with an extended “Bill Me Later” provision. Both policies are potentially helpful for shoppers, but they both also come with the potential to prod consumers who are on the fence into making purchase they wouldn’t have otherwise made.