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The rising cost of free shipping

Shoppers must spend more this holiday season to avoid a shipping charge.

By MSN Money Partner Nov 28, 2011 11:21AM

This post comes from Kelli B. Grant at partner site SmartMoney.

 

SmartMoney on MSN MoneyShoppers may have more incentive to buy online this year: The sales are as big as -- if not better than -- in-store offers and many retailers are offering free shipping.

 

The catch, say experts: Shoppers have to spend more to qualify for free shipping this year. Post continues below.

Some 93% of stores will offer a free shipping deal this year, up from 85% last year, according to the National Retail Federation arm Shop.org's projections. But unlike last year, when many retailers offered free shipping on everything, regardless of the amount spent, this year consumers have to pay a minimum, says Luke Knowles, founder of free-shipping-focused deal site FreeShipping.org. In the NRF's annual study of Cyber Monday offers, for example, 30% of sites said they'd offer free shipping on some orders. Last year, 22% offered it on all orders.

 

Even though online sales are projected to rise 15% this holiday season, according to Forrester Research, experts say the cost of shipping can still make or break a purchase. "Free shipping has become the expectation for consumers," says Kit Yarrow, a professor of psychology and marketing at Golden Gate University in San Francisco. Retailers raising minimums on their offers helps them avoid a loss on shipping fees and encourages consumers to spend more.

 

"This really doesn't work out for the consumer," she says.

 

Shoppers' best defense is to look at overall deals and not just the shipping fee, says Dan de Grandpre, founder of sale-tracking site Dealnews.com. For example, many sites allow only one coupon code per order. In those cases it's best to compare all available offers to see what's cheaper -- a code for shipping, or one for a discount on the purchase price.

 

It's also worth checking for free shipping offers on particular products. At this time of year, retailers including Wal-Mart and Best Buy put special shipping promotions on hundreds of items that carry a charge during the rest of the year, he says.

 

A growing number of sites automatically offer free shipping on orders of a certain amount, no coupon code required, Knowles says. In the past year, J.C. Penney, Macy's, L.L. Bean, Gap and Nordstrom all moved to that model. Such offers let shoppers grab free shipping and still use a coupon code (or two) to further reduce their total. Old Navy, for example, offers free shipping for all orders over $50, leaving visitors free to add recent codes for 15% off, say, and an extra 10% off on Tuesday when you use a store credit card. (The order must still total $50 or more after the discounts to get the free shipping.)

 

Even if the free shipping is automatic, it's still worth reviewing coupon sites to see if there's an even better offer, de Grandpre says. Old Navy and Gap silver cardholders get free shipping on any order, no matter what the dollar amount, when they use the code "SILVER."

 

More on SmartMoney and MSN Money:

6Comments
Nov 28, 2011 10:18PM
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Free shipping?  More likely what you get for free, usually ends up costing you in the end. Surprised
Nov 29, 2011 5:07AM
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Free shipping?  I bought 5 shirts from LL Bean which were listed at $39.95 each in their on-line catalog.  I thought I received free shipping until I opened the shipping carton, and found a price tag on one of the shirts for $34.95.  They had raised the price of each shirt by $5.00 to cover the cost of their "free" shipping.  I actually paid $25.00 more for the shirts than I should have paid.  So, don't believe all of the "free" shipping advertisements you see on line.
Nov 29, 2011 11:21AM
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There has never been free shipping.  Someone has to pay for it.
It would be more honest to say shipping included but shoppers seem to prefer the illusion of getting something for nothing.
Nov 29, 2011 2:05PM
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You can be sure the cost of shipping is figured into the cost of the item,or items, somewhere.
If you've shipped something yourself you know how much the cost is these days,whether UPS, FedEx, or USPS.  So nothing is "Free", it's just a good sales pitch!

Nov 29, 2011 12:01PM
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ILLUSION....free shipping.... but you know what it it easier than to go out there and try to find some gifts/parking/ deal with unsatisfactory people.  I did all my shopping all free shipping and I am done.  MERRY CHRISTMASMartini glassSmileParty!!!!!

Nov 29, 2011 12:17PM
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well, let's see ... it's FREE for now and the cost is rising, so ...

 

will it be "FREE plus interest and fees" later?

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