Free shipping isn’t free.
Recently, I was shopping for new pajamas for our son. The website where I was shopping offered free shipping on orders of $85 or more. Conveniently for them, it would seem, none of the items alone met that total and buying 3 pairs of pajamas got you very close, but not quite, making it enticing to buy a fourth pair, even though I only planned on buying three. You see, the pajamas, which are normally $34 a pair were 20% off. This made them about $27 a pair. While I was excited to get a deal because of the sale, I ended up spending more than I would have normally because I got suckered into the free shipping fallacy. I bought four pairs of pajamas for a whopping $108. I only needed three pairs of pajamas for the kiddo, which would have cost me $81, but I figured I should take advantage of the free shipping. So, rather than spend 5.99 for shipping, I spent an additional $27 (+ tax). Had I paid for the shipping, I would have saved about $21 because we did not need four pairs of pajamas.
After this happened, I started realizing how I was getting sucked into this everywhere I was doing online shopping. I was trying to get the right combination of items to make up the difference in shipping costs, but frequently buying things I didn’t really want or need just to not pay for shipping.
A couple of years ago, The Atlantic posted a piece titled “Stop Believing in Free Shipping”. The article explores the harm big retailers (think Amazon and Walmart) have caused for small sellers when they’ve created this expectation that not only should shipping be free, but it should also be very fast. Small sellers, who don’t have the margins to offer free shipping, suffer the consequences. The article also explores, and this was what was really intriguing to me, an economic principle called “the pain of paying”. Essentially, the “pain of paying” is a psychological discomfort that stops people from clicking “checkout” when they must pay for more than what they came to purchase (i.e., shipping). The pain associated with paying for shipping is greater than what would happen if a store offered you a discount, even if those amounts balanced out. We don’t want to pay more for the things we’re shopping for and feel like we’re being taken advantage of when we do.
The pajamas for my son were sort of a double sucker: I got roped in because of the sale, and then spent more than I intended because I felt like I wasn’t getting a good “deal” if I didn’t get the free shipping. You’ll notice that websites have these “free shipping” thresholds created very strategically. While one site can offer free shipping on purchases over $35, others might not offer it until you reach $150 in your cart. These amounts seem to correspond to cost of the items they sell and, I’ve found, often means I have to purchase more than one item to qualify for the free shipping.
So, next time you’re shopping online, do the math. Is the free shipping really free or are you sensitive to the “pain of paying” and perhaps are being pulled in to buying more than you meant to?