The Truth About “Free Shipping” and Online Shopping

Many online retailers will have you believe that you’re getting a great deal by offering free shipping. But is it really as “free” as you think?
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In a retail landscape where brands are vying for your every dollar, an online promotion really can go a long way with price conscious consumers! What was once thought of as a perk for surpassing a minimum spend threshold, ‘free shipping’ is now considered a necessity in order to shop online. With an increasing amount of retailers waiving or lowering the minimum spend to qualify for no-cost shipping, the question should be asked: what does ‘free shipping’ really mean? Keep reading to find out how retailers are still making money off of your online purchase while offering free shipping.

By Building the Shipping Cost into the Product’s Price

Just because you aren’t paying for shipping, doesn’t mean that the retailer gets to skip out on their fee to the delivery company. In order to offset this expense, most online retailers will take the cost of shipping and factor it into each product’s purchase price so that they never lose out. The staggering cost of shipping revealed at the time of checkout can leave many online shopping carts abandoned. As a result, savvy retailers are going the ‘free shipping’ route to entice shoppers to complete their online orders.

By Offsetting the Cost of Shipping with More Shopping

Ever shop online and find it impossible to hit the minimum spend and stick to your budget? For example, you qualify for free shipping with a minimum $30 purchase, however every item online is priced at $25, so you end up buying $50 worth of merchandise. Retailers are very strategic when it comes to pricing and will find any way to get you to spend more than you may have intended in order to cover the costs of delivery (and then some).

By Inflating Shipping Fees for Other Shoppers

Didn’t reach a minimum spend threshold to qualify for free shipping? Rest assured, you’ll be paying more than usual to ship that parcel your way. Many retailers inflate the cost of standard and express shipping for less price-conscious customers (those not looking for a bargain,) to compensate for the expense of offering other customers free shipping.

By Implementing Stricter Exchange and Return Policies

If there’s a cost associated with shipping an order to a customer, you better believe that it’s even more expensive to also pay for their return shipping! A ton of online retailers offer inconvenient exchange and return policies in the hopes of you keeping your online purchase after its been thoughtfully picked, packed and shipped to your doorstep. Those retailers offering free exchanges and returns in-store are taking advantage of getting additional foot traffic into their traditional retail stores in the hopes of you buying another item that catches your eye.

What does ‘free shipping’ really mean to you? Which retailer does it best?

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