As a consumer finance expert and avid Kohl‘s shopper, I know how important it is to have convenient and secure payment options at checkout. And with the meteoric rise of digital payment platforms like PayPal, more and more consumers are looking for retailers that accept their preferred contactless payment methods.
But does Kohl‘s, one of the nation‘s largest department store chains, take PayPal? I dug into the retailer‘s policies and the wider payments landscape to find out. Here‘s everything you need to know to make an informed decision about how to pay at Kohl‘s.
Inside the Mind of the Kohl‘s Customer
To understand why Kohl‘s payment policies matter, it‘s helpful to consider the retailer‘s target customer. With over 1,100 stores across the U.S. and a thriving e-commerce business, Kohl‘s has built a loyal following among budget-conscious shoppers who love a good deal.
The typical Kohl‘s customer skews female and tends to be a busy mom juggling work and family responsibilities. She appreciates Kohl‘s wide selection of affordable, stylish clothing and home goods, and is always on the lookout for sales, coupons, and other promotions to stretch her shopping budget.
For this savvy shopper, flexibility and options are key when it comes to payment methods. She wants to be able to choose the most convenient and rewarding way to pay, whether that‘s with a store credit card that earns bonus discounts, a cash-back credit card, a debit card that keeps her spending in check, or a digital wallet that allows for quick and easy checkouts.
The State of Play in Retail Payments
The payments landscape has evolved rapidly in recent years, with consumers increasingly turning to contactless and digital payment methods. According to a 2020 McKinsey study, the pandemic accelerated the shift to digital payments by three to five years, with 82% of Americans now using digital payments.
As more commerce moves online and shoppers prioritize speed, simplicity, and security at checkout, retailers are under pressure to expand the range of payment options they accept. A 2021 report from Worldpay found that digital wallets are poised to overtake credit cards as the leading e-commerce payment method globally by 2024.
For a major retailer like Kohl‘s, staying competitive means catering to customers‘ changing payment preferences and expectations. That might involve everything from upgrading point-of-sale systems to integrate NFC technology for contactless payments to partnering with popular digital payment platforms.
Why Doesn‘t Kohl‘s Accept PayPal?
Despite the growing popularity of digital wallets, Kohl‘s has notably chosen not to accept PayPal—one of the most widely used payment platforms—directly on its website or in its stores. While you can use the PayPal Cash Card (which I‘ll discuss in more detail below) to spend your PayPal balance at Kohl‘s, you won‘t find PayPal listed as a standard payment option at checkout.
So what‘s behind this policy decision? Kohl‘s has remained tight-lipped about its reasons for not partnering with PayPal, but there are a few potential explanations.
Cost-Benefit Analysis
One factor is likely the costs associated with integrating and supporting an additional payment platform. As a retailer with slim profit margins, Kohl‘s has to carefully weigh the benefits of accepting a new payment method against the expense of implementation.
PayPal charges merchants a fee for each transaction processed, which can eat into already thin margins. For a high-volume retailer like Kohl‘s, those fees can add up quickly. According to PayPal‘s website, U.S. merchants pay a rate of 2.99% + $0.49 per online transaction.
Promoting Proprietary Payment Options
Kohl‘s may also be opting out of PayPal as part of a broader strategy to drive adoption of its own branded payment products. The retailer offers two main store credit cards—the Kohl‘s Card and the Kohl‘s Charge—which come with exclusive discounts and perks for cardholders.
By funneling customers toward these proprietary payment options, Kohl‘s can avoid the transaction fees associated with third-party payment processors while also building customer loyalty and collecting valuable data on shopping behavior.
"Retailers are always looking for ways to differentiate themselves and create a more sticky customer relationship," says Jill Emanuel, a partner at PwC who focuses on consumer markets. "One way to do that is through branded payment products that offer unique value propositions and keep shoppers coming back."
Competitive Considerations
Finally, Kohl‘s PayPal policy may be influenced by the competitive landscape and the payment strategies of other retailers in its peer group. While some major retailers like Target and Best Buy have embraced PayPal, others like Walmart and Costco have notably held out.
"There‘s a bit of a domino effect when it comes to payment partnerships," says Richard Crone, CEO of payments consulting firm Crone Consulting LLC. "Retailers are always watching what their competitors are doing and trying to assess whether they need to follow suit in order to stay relevant with customers."
For Kohl‘s, the calculus may be that the benefits of accepting PayPal—which would likely include a modest bump in online sales from PayPal loyalists—don‘t yet outweigh the costs and strategic tradeoffs involved.
How to Make the Most of Your PayPal Balance at Kohl‘s
Just because Kohl‘s doesn‘t take PayPal directly doesn‘t mean you‘re out of options if you prefer to use your PayPal account for shopping. The PayPal Cash Card provides a nifty workaround that allows you to spend your PayPal funds anywhere Mastercard is accepted, including at Kohl‘s.
PayPal Cash Card 101
The PayPal Cash Card is a debit card that‘s linked directly to your PayPal balance. You can request one straight from your PayPal account online or in the mobile app, and there‘s no credit check or minimum balance required.
Once you have the card in hand, you can use it to make purchases both online and in-store, with the funds debited directly from your PayPal account. The card is accepted anywhere Mastercard is, which includes the vast majority of U.S. retailers.
Using the PayPal Cash Card at Kohl‘s is simple:
- At an in-store checkout lane, just swipe or insert your card as you would any other debit or credit card. The transaction amount will be deducted from your PayPal balance.
- For online Kohl‘s purchases, enter your PayPal Cash Card number in the credit card field at checkout. As long as you have enough funds in your PayPal account to cover the transaction, it will process normally.
One important thing to note is that while the PayPal Cash Card does offer some buyer protections, it doesn‘t come with the same dispute resolution process or insurance that‘s available when you check out with PayPal directly.
Maximize Your Savings
Another potential downside of using the PayPal Cash Card at Kohl‘s is that you may miss out on some of the retailer‘s best discount opportunities, which are often tied to its store credit cards.
Kohl‘s is known for its frequent sitewide sales and generous coupon offers—and often, Kohl‘s cardholders get access to the deepest discounts. The Kohl‘s Card entitles shoppers to an additional 35% off their first purchase, plus 12 special discount offers per year. Kohl‘s also routinely offers exclusive coupon codes for cardholders.
While the PayPal Cash Card may be more convenient for some Kohl‘s shoppers, it‘s worth considering whether you‘d save more in the long run by opting for a Kohl‘s Card instead. Of course, store credit cards tend to carry high APRs, so this approach only makes sense if you‘re confident you can pay off your balance in full and on time each month.
Stack Your Rewards
If you do opt to use the PayPal Cash Card at Kohl‘s, there are still plenty of ways to stack rewards and make your money go further. One strategy is to link your PayPal Cash Card to a rewards credit card as a backup funding source.
"By linking a rewards card to your PayPal account, you can essentially ‘double dip‘ on rewards," says Trae Bodge, a smart shopping expert who specializes in maximizing credit card perks. "You‘ll earn rewards on the initial purchase when you use your PayPal Cash Card, and then again when your linked card is charged to cover the transaction."
Just be sure to pay off your credit card balance in full each month to avoid negating your rewards with interest charges.
You can also take advantage of Kohl‘s Cash, the retailer‘s popular loyalty program. During specified earning periods, you‘ll receive a $10 Kohl‘s Cash coupon for every $50 you spend, regardless of how you pay. Those coupons can then be redeemed for additional savings on a future purchase.
The Future of Payments at Kohl‘s
As digital payments continue to gain steam, will Kohl‘s eventually hop on the PayPal bandwagon? While the retailer hasn‘t tipped its hand, there are some signs that it may be open to expanding its payments mix in the future.
In 2021, Kohl‘s teamed up with Sezzle, a "buy now, pay later" (BNPL) provider, to offer customers the option of splitting their purchases into four interest-free payments over six weeks. The partnership marked Kohl‘s entry into the booming BNPL space and suggests a willingness to embrace emerging payment technologies that resonate with younger, digitally-savvy shoppers.
"The payments landscape is evolving at a breakneck pace," says Crone. "Retailers that want to stay ahead of the curve need to be constantly evaluating new technologies and partnerships that can help them meet customers where they are."
That said, Kohl‘s has also signaled its commitment to promoting its own payment products as a key pillar of its growth strategy. In a 2022 earnings call, CEO Michelle Gass emphasized the importance of the company‘s credit card portfolio in driving sales and customer loyalty.
"We continue to see our Kohl‘s Card as an important tool for deepening engagement with our customers," Gass noted. "We remain focused on driving acquisition and innovation in our proprietary credit offerings."
Ultimately, whether and how Kohl‘s expands its payment options will likely depend on a complex mix of factors, from shifting consumer behavior to competitive pressure to the retailer‘s own strategic priorities. As a savvy shopper, the best thing you can do is stay informed about your options and choose the payment method that best aligns with your spending habits and financial goals.
The Bottom Line
While Kohl‘s doesn‘t currently accept PayPal directly, that doesn‘t mean you‘re out of luck if you prefer to use your PayPal balance for shopping. The PayPal Cash Card offers a handy workaround, allowing you to spend your PayPal funds anywhere Mastercard is accepted, including in-store and online at Kohl‘s.
Of course, there are potential tradeoffs to consider. Using the PayPal Cash Card means missing out on some of Kohl‘s most attractive discounts and rewards opportunities, which are often reserved for store cardholders.
Ultimately, the smartest payment strategy will depend on your personal financial situation and shopping habits. If you‘re a frequent Kohl‘s shopper who always pays your bill in full, the Kohl‘s Card may be your best bet for maximizing savings. If you prefer the security and convenience of PayPal, the Cash Card can be a useful tool. And if you‘re a rewards hound, you may want to explore creative ways to "double dip" by linking your favorite rewards credit card to a digital wallet.
The key is to stay informed and proactive. By understanding your options and aligning your payment method with your financial goals, you can shop with confidence—and keep more cash in your wallet. And who knows? With the world of payments evolving at a dizzying pace, we may see even more exciting options crop up at our favorite retailers in the years to come.
