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