eBay (EBAY) is expanding its same-day delivery service to San Jose, a sign that the online marketplace company is stepping up efforts to compete with retail giant Amazon and Walmart's same-day delivery service.

eBay announced on Thursday that customers can now buy merchandise from local stores through a free iTunes app called eBay Now, and their purchase will be delivered within an hour to anywhere in San Jose. The app lets shoppers track their delivery.

The 60-minute delivery service was launched last year in San Francisco. eBay also rolled out delivery in

A sign is shown at the headquarters of eBay in San Jose on Feb. 2, 2010. REUTERS/Robert Galbraith (© Robert Galbraith / Reuters)

The charge is $5, and eBay will only deliver for orders that are at least $25. If the customer wants to return the item, the driver will schedule a pickup and a refund appears in the customer's PayPal account.

eBay Now is available from 9 a.m. to 9 p.m. Monday through Saturday, and from 9 a.m. to 6 p.m. on Sunday.

Contact Heather Somerville at 925-977-8418. Follow her at Twitter.com/heathersomervil.