By directly addressing a concern of online shoppers, this service aims to boost consumer confidence and help drive online retail by refunding return shipping costs on eligible online purchases within Canada and around the world.

A study from Ipsos reports that 40 per cent of Canadians are worried about ordering the wrong item online and not being able to return it. A further 27 per cent said they have been forced to pay for shipping back items in the past year, with the majority (65%) saying it cost them more than $10 each time.

"Canadians are warming up to online shopping, but uncertainty around returns can make people think twice about clicking the buy button," says Kerry Reynolds, Head of Consumer Marketing, PayPal Canada. "With our new service, we are providing people with an option to return items purchased online that don't fit or match their expectations."

Return Shipping on Us also benefits Canadians who shop from international websites that they might not be familiar with. PayPal's Cross-Border Consumer Research 2015 revealed that 10.7 million Canadians engage in cross-border online shopping, with 38 per cent saying that if free return shipping was offered, they would be more likely to buy online from another country. A quarter of Canadians who shop from international websites, and nearly 40 per cent who do not shop cross-border, mentioned that return shipping costs are holding them back.

"Canadian e-commerce is expected to grow by 8 per cent in 2016 to $34.5 billion*. With online retail competition heating up locally and internationally for Canadian businesses, Return Shipping on Us is a competitive differentiator," Reynolds added. "Our investment in this service is a potential revenue driver for smaller online sellers who can't afford to offer free returns to their customers."