🚚 The Smart Way to Offer Shipping (Without Killing Sales)

📦 🚚 The Smart Way to Offer Shipping (Without Killing Sales)

Source: Thomas McKinlay, Free Shipping or Shipping Fees?

Shipping can make or break a sale. Should you say “FREE” or “$0”? Should you offer free shipping over $40? Here’s what psychology says about what really works — and how to use it to boost conversions and profits.

✅ Key Findings

1️⃣ “$0 Shipping” vs “FREE Shipping”

• $0 Shipping converts better than FREE Shipping
• Reason: $0 frames it as “no loss” → taps loss aversion
• FREE feels like a bonus, but doesn’t trigger the same mental relief

2️⃣ Threshold Shipping (“Free over $X”)

• Can decrease conversions overall
• BUT, may increase Average Order Value (AOV) if customers add more to qualify
• Trade-off: Lower conversion rate vs. higher basket size — needs testing

3️⃣ Returns Behavior

• Free shipping leads to higher returns for emotional buys (e.g. clothing, snacks)
• Functional items (cleaning supplies, office products) less affected

4️⃣ Pricing & Fees Presentation

• Just-below pricing ($4.99) still outperforms round numbers ($5)
• Flat-rate shipping is better than complicated shipping tables — reduces cognitive load
• Customers treat shipping fees as pure loss, separate from product value

5️⃣ Bundling Tactic

• Hiding shipping costs inside product price works well for non-returnable products
• For high-return categories, clearer separate fees may reduce abuse

🧩 Practical Ideas to Test

✅ Use “$0 Shipping” wording instead of “Free Shipping”

✅ Compare threshold vs. no-threshold shipping offers — measure AOV and conversions

✅ Use flat-rate shipping rather than complex shipping tables

✅ Consider bundling shipping into price for low-return items

✅ Use just-below pricing for both products and shipping fees

🔬 Key Insight

Shipping cost is perceived as pure pain. Eliminate, hide, or flatten it — but test side effects like returns or AOV shifts.

💡 Suggested Tests:

• A/B test “$0 shipping” vs “Free shipping” wording
• A/B test threshold shipping vs flat free shipping
• Track returns rate by category when offering free shipping