PayPal Gets Out The Big Guns With Huge Holiday Promotion
PayPal has just announced that they are going to spend $100 million over the next 6 months to drive buyers to merchants offering PayPal, offering both free shipping and up to $20 in cash back on up to 100,000 merchant sites.
PayPal Seller Promotion Details
PayPal Buyer Promotion Site
Here are details (with the fine print) from PayPal:
Receive free shipping when you make a purchase using your PayPal account from a participating merchant. Participating PayPal merchants will be displayed on the PayPal Holiday landing page starting 11/23/06. See merchants’ website for additional terms & conditions. Receive 3% Cash Back (up to $90) by registering for this Cash Back offer on http://paypal.promotionexpert.com/holiday and purchasing items from participating PayPal merchants using your PayPal account. Once registered, purchases must be made between 12:00:00 AM Pacific Time (PT) on November 23, 2006 and 11:59:59 PM PT on December 15, 2006 to qualify for this offer. The following transactions are excluded from this Cash Back offer: eBay transactions, Send Money transactions, payments to Personal Accounts, donations and payments for services. Limit one registration per person and/or PayPal Account. Offer available for a limited time. The 3% Cash Back will be deposited into the participants’ PayPal accounts within 4 to 6 weeks after the end of the offer. PayPal account must be in good standing prior to and throughout the offer period to be eligible to participate.
The free shipping offer extends to both on and off eBay while only off-eBay transactions are eligible for the 3% cash back promotion. They have already announced an impressive list of participating sellers: Barnes & Noble, Dell, Petsmart, Starbucks, Art.com and part of HP (as announced last week). 
So according to the T&C’s you could purchase a few Starbucks cards to buy your coffee and scone every morning and receive a quarter cash back every time. That could easily add up to a few dollars before December 15th!
This is big for online merchants and the size of this promotion is clearly in direct response to Google Checkout grabbing market share. Nothing drives sales as much as free shipping especially during the holidays, you can bet I am going to be using PayPal a lot more during the upcoming weeks — unless the merchant offers a better promotion (using Google Checkout?).