As the holiday season ramps up and Black Friday deals dominate inboxes, Canadians and Americans alike are bracing for a shopping season unlike any other. On November 11, 2025, PayPal officially introduced its Buy Now, Pay Later (BNPL) service to Canada, joining a roster of payment options that are reshaping how people budget for gifts, emergencies, and festive splurges. This move comes as the National Retail Federation projects that retail sales in November and December will surpass $1 trillion in the U.S., a 4.2% increase from the previous year, even as shoppers grapple with inflation and economic uncertainty, according to reporting from Money.com and the Canadian Press.
PayPal’s BNPL launch in Canada marks a significant expansion for a service that’s already gained traction south of the border since 2020. The offering allows shoppers to split purchases between $30 and $1,500 into four equal, interest-free payments over six weeks, with no late fees—a feature that’s especially appealing as consumers look to stretch every dollar this season (as reported by PayPal and the Canadian Press). The service joins a crowded field, with Affirm, Klarna, Sezzle, and Afterpay also available at major retailers like The Home Depot and Ticketmaster. For many, these flexible payment plans are a lifeline, helping to manage cash flow and avoid costly credit card interest at a time when every cent counts.
But with more ways to pay come more reasons to be cautious. As Money.com highlights, shoppers are “feeling the pinch from multiple angles,” a sentiment echoed by retail expert Wendy Bergh of Rakuten Rewards. “Inflation is still very real, but we’re also seeing financial pressures from rising tariffs and lingering concerns about personal finances,” Bergh wrote in an email. While most Americans haven’t yet felt the full brunt of new tariff policies, the ripple effects are being felt in supply chains and store shelves. Retailers are adjusting their inventory strategies, which could mean shortages on popular items like toys and holiday decor.
Despite these economic headwinds, the spirit of giving remains strong. According to a Gallup poll cited by Money.com, most Americans plan to spend about the same on gifts as last year, averaging $1,007 per person. Yet, the way people are shopping—and paying—has changed dramatically. Dana Bodine, vice president of marketing at Trustpilot, observed, “What I think is completely changing is the consumer purchasing journey.”
One of the most striking trends this year is the rise of artificial intelligence in holiday shopping. Gen Z and millennials are leading the charge, using AI to personalize gift lists, find deals, and stick to budgets. PayPal’s own research found that 61% of Gen Zers and 57% of millennials used AI to help with purchases in the past year. Adobe predicts that AI-driven traffic to retail sites will surge by 520% this season. Lupine Skelly, Deloitte’s retail, wholesale, and distribution research leader, noted that this generation is “looking for deals and figuring out ways to make the holidays happen.” AI-powered tools are now helping shoppers not only compare prices but also act as virtual personal shoppers—taking instructions and executing purchases with unprecedented efficiency.
The proliferation of BNPL services is another game-changer. According to PayPal, half of surveyed consumers intend to use BNPL for their holiday shopping this year. The appeal is clear: break up big-ticket purchases into manageable, interest-free payments, without the risk of late fees if payments are made on time. For cash-strapped shoppers facing higher living costs, this flexibility can be a valuable bridge—if used strategically.
However, experts warn that BNPL is not “free money.” Missed payments can still impact credit scores, and the ease of spreading out payments can tempt shoppers to overspend. Money.com notes that it’s common for BNPL users—especially those who are younger or have lower incomes—to juggle multiple BNPL loans at once, increasing the risk of financial strain. “The best move you can make right now is to go from a ‘buy now, worry later’ mindset to a ‘plan and earn’ strategy,” Bergh advised. Experts recommend tracking all BNPL plans and loans, ideally with a budgeting app or spreadsheet, to avoid unmanageable debt and missed payments that could add costs or damage credit.
For those wary of taking on more debt, there are alternatives. Canadian shoppers can take advantage of price-matching programs at retailers like Canadian Tire and Best Buy, both of which also offer BNPL options. Cash-back credit cards can help earn rewards on planned purchases, while layaway programs at independent stores provide a way to reserve items without a credit check. Buying used or refurbished goods from trusted sellers on platforms such as Facebook Marketplace or eBay is another way to save without sacrificing quality.
Yet, not all shoppers are turning to BNPL or alternative payment methods. A July 2025 poll found that 27% of millennials plan to take on credit card debt to cover holiday expenses, while 40% of Gen Zers are prepared to dip into their savings. These statistics underscore the financial balancing act many households are facing as they navigate the pressures of inflation, tariffs, and the desire to maintain cherished holiday traditions.
Auxiliary holiday expenses—like photos with Santa or tickets to festive performances—are among the first to be cut as families prioritize spending on gifts, according to Deloitte’s Skelly. Still, the core tradition of giving remains intact, with most shoppers determined to keep presents under the tree (or menorah, or wherever they may gather for the season).
As interest-free installment plans become more mainstream, consumers have more ways than ever to manage expenses without relying on high-cost credit. But the best savings, experts say, still come from planning ahead, tracking spending, and resisting impulse purchases. Stacking deals, combining discounts, and leveraging loyalty points have become the new normal, not just clever hacks. “This season, stacking deals isn’t a hack—it’s the new normal,” Bergh said, reflecting a broader shift toward smarter, more intentional spending.
Ultimately, whether shoppers opt for BNPL, lean on AI, or stick to traditional payment methods, the 2025 holiday season is shaping up to be a test of resilience, creativity, and financial discipline. The tools are there for those willing to use them wisely—but as always, a little planning and a lot of self-control go a long way toward keeping the holidays merry and bright.
