Why does free shipping hold so much value to customers?

[olimits7]

Hi,

I'm running a basic poll on my website asking customers what they value the most when they shop online, and it seems like so far I got the most replies for "free shipping".

However, I looked up a bunch of different items on my site and for the most part I'm still very competitive even including shipping against my other competitors.

So I was wondering why do customers value free shipping so much even if my prices including shipping are still very competitive? Do they just like seeing the terms "free shipping"?

For me, as long as the total order price including shipping is still competiive against other competitors it doesn't matter to me what the shipping cost is.

For example; retailer A could have item price of $50 and free shipping, but retailer B could have item price of $30, and shipping cost of $18 and I would most likely buy from retailer B.

Thank you,

olimits7

[dickbaker]

One way that "free shipping" can come back to bite you is if you have a really dumb customer who wants to exchange an item. My prices are very low. I don't build in costs for fraud, returns, exchanges, and so on. I figure the people who incur additional costs should be the ones who pay for them.

On exchanges, I tell people that they'll have to pay the additional shipping cost for the second item. Most people understand this, but some will say "but the shipping is free". I then have to explain that UPS and the USPS don't really give me free shipping, that I do have to pay for it, that it's built into the price, and must be paid again when another item is shipped.

[incrediBILL]

if you have a really dumb customer who wants to exchange an item.

Again, customer education is key here and so is policy documentation.

You should have a "returns policy" plainly posted on the site that states the customer pays return shipping. It should also explain that the shipping costs to the customer were included in the original purchase price.

This should be posted on your cart page and/or checkout area.

Even if they didn't read it, it's there and you can point to it when they complain.

[piatkow]

You should have a "returns policy" plainly posted on the site that states the customer pays return shipping. It should also explain that the shipping costs to the customer were included in the original purchase price.

Check local consumer protection laws in your own jurisdiction before following any advice here. Remember that consumer protection laws in the US are pretty lax by European standards and other countries may not permit the sort of exclusions that are often recommended.

[Planet13]

You should have a "returns policy" plainly posted on the site that states the customer pays return shipping.

With all due respect, our Returns Policy page is the LEAST visited page on our site, according to google analytics.

So on our checkout pages, we have a "summary" of our Returns Policy, our Privacy Policy, and our Satisfaction Guarantee. "Now they can't miss it. Certainly they will read the terms if they are right there on the checkout pages, right?"

Uh... not so much... Looking at the heat map / scroll map for our checkout pages, turns out customers scroll right past it and instead look at the summary of the items in their cart and the subtotal.

[incrediBILL]

With all due respect, our Returns Policy page is the LEAST visited page on our site, according to google analytics.

With all due respect, I didn't say make it a stand alone page now did I? :)

I know people skip those pages and then complain they didn't know later because customers love to think that ignorance is an excuse to get their way. This is why I said post the "returns policy" so it's plainly visible in multiple locations, which it sounds like you've already done.

On a site I did for a client years ago he put all the policies on a page during checkout with a checkbox that had to be checked, just like a shrinkwrap license, before it would allow checkout to continue. Customers had to check "Yes, I have read and agree to XYZ's shipping and return policies" before it would let them complete the sale. Now whether the customer actually read them at this point is irrelevant as they agreed to them, it was binding, ignorance was no longer an excuse!

Seems to me some big retailers do this and the registrars, like GoDaddy, definitely have something along these lines during checkout.

piatkow is right, check local laws, other countries are way more strict about certain ecommerce aspects than the US which is silly really. We should have a little more consistency and consumer regulation in such matters yet it varies state to state instead of nationwide.

[tangor]

This was a few years back on a "throwaway" site which had a short term offer for a particular product with a limited shelf life. It was priced: $15.00 plus $2.95 shipping. OR Free Shipping if you drive to our location, else we have to pack it up, drive to the post office, put stamps on it and drive back to the office. Send $17.95 (total) for your Nifty Keen Widget delivered to your door.

We sold a bunch of Nifty Keen Widgets with $2.95 shipping. :)

[dickbaker]

There's a link on every product page on my site to the Returns Policy page. Near the end of each product description is a sentence saying, "Please also read our Return Policy", with the word "Return" being a hyperlink that opens a window showing the return policy.

So, if the customer goes to the Ajax widgets page, there will be both links. On the Ajax model 123 page, there's both links. At the shopping cart page there's the link to the Return Policy page. Ditto for the shipping information page, and the credit card information page.

[PCInk]

Piatkow raises an interesting point regarding Europe. The UK has rules that state a consumer can return an item (if they follow strict rules) and all their money has to be returned. That's right - no handling charges, shipping costs have to be refunded too.

The thing is, many customers don't realise this and think that shipping costs are lost once the item has been sent. That can be one reason why free shipping makes customers feel more comfortable in case they need to return something (for whatever reason).

[dickbaker]

That's right - no handling charges, shipping costs have to be refunded too.

That means that the merchant has to charge more to cover costs. He's having to charge everyone extra because some people don't know what they want. I've always thought that was ridiculous.

[piatkow]

He's having to charge everyone extra because some people don't know what they want

Welcome to my world.

[Planet13]

One other thought on this:

we have two brick and mortar stores. We get a LOT of people who just come in and browse.

So maybe it is something of a holdover from brick and mortar? People think that getting something with free shipping takes the "risk" out, something like browsing or window shopping?