• by Gavin O'Malley  @mp_gavin, November 10, 2009

Heading into another cutthroat holiday shopping season, etailers need all the help they can get. And comScore is reporting that PayPal promotions launched in the fourth quarter of last year prompted a significant increase in the payment method's share of dollars spent at major retailer sites, including Overstock.com and Walmart.com.

"PayPal's aggressive promotion strategy during the 2008 holiday season helped the popular online payment method carve out a significantly higher share of wallet at several major retailer sites," said Matt Archer, comScore senior manager of financial services.

During the fourth quarter of 2008, Overstock.com customers were presented with 15% cash back on a $100 purchase when using PayPal, which helped push its dollar share up 3.6 percentage points to 18.6%, according to comScore.

Walmart.com, which launched its partnership with PayPal in early October 2008, offered $20 off a purchase of $50 or more when customers used a PayPal account to check out, resulting in a 9.0 percent dollar share during the quarter.

Dell.com, meanwhile, gave PayPal preferential treatment, positioning the payment option right under Dell's payment plan and above all other credit card options -- helping to boost PayPal's share to 7.0 percent in the fourth quarter, an increase of 5.1 percentage points from the previous quarter.

"Despite the limited duration of the promotions, PayPal has managed to retain a notable share of wallet at most of these retailer sites in subsequent time periods," Archer added. "As merchants and payment services make decisions related to 2009 holiday promotions, the positive impact of prior programs in growing share of dollars and transactions represents critical information."

ComScore recently reported that national online spending in the third quarter slipped 2% to $29.6 billion versus last year -- which represents the first time since comScore began tracking the figures that online spending has shrunk for two quarters in a row.

Forrester Research, however, recently concluded that online sales in November and December are likely to grow 8% year-over-year. Moreover, a survey Forrester conducted with the National Retail Foundation found that online retailers reported sales in the third quarter grew 16%.

Why the discrepancy? The two researchers take different approaches to understanding how consumers shop online. ComScore measures the online behavior of a nationwide panel of volunteers who allow the company to track everything they do online, while Forrester surveys retailers and consumers, and takes in data from other sources such as ads bought by online retailers from Google.