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Is free shipping really free?
Are 'free shipping' promotions a great way to save money, or just a ploy? We investigated what online retailers are really offering.
Thu, Nov 08 2012 at 6:01 PM
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Photo: cafemama/Flickr
Deals abound this time of year, and many of those holiday bargains can be found online. In the past, one of the drawbacks of shopping online had been the added cost of shipping. However, retailers are stepping up their efforts to boost online sales and are offering free shipping promotions.
But is “free” shipping really free? We investigated what online retailers are really offering.
Amazon.com’s Amazon Prime, for example, provides free, two-day shipping, along with a number of other perks, such as unlimited streaming video. But here’s the catch: The service's annual fee is $79 — which means you’d have to make at least 20 separate Amazon orders in a year for the service pay for itself (although, it should be noted, that up to five family members across the U.S. can share the free-shipping perks).
One of the newest promotions involves retailer-specific credit cards. Retailers, such as Target and Sears, offer similar proprietary credit cards that come with free-shipping options, but they also charge hefty annual fees.
The fine print
Retailer-specific credit cards aren’t the only way to score free shipping; many online merchants offer other options. However, there are a handful of restrictions you should be aware of before placing your order.
Most free-shipping offers require a minimum purchase amount — enticing customers to spend more than they might have in the first place — and some items may not qualify toward that total. Here’s a breakdown of some popular retailers’ minimum purchase amounts and their restrictions on free shipping.
Amazon.com: Minimum purchase: $25 on items labeled “FREE Super Saver Shipping.” If some of your items qualify but your order also contains ineligible items, Amazon will charge shipping fees for the ineligible items. Free shipping excludes certain oversized orders and there may be some restrictions on items shipped to Hawaii, Alaska and Puerto Rico.
Walmart: Minimum purchase: $45 on eligible orders. Walmart also offers an option to ship items free to your local Walmart location, which saves on shipping but that doesn’t save you a trip to the store.
Target: Minimum purchase: $50 on qualifying purchases. Free shipping is limited to delivery inside the contiguous U.S.
Overstock.com: Minimum purchase: $50. Free shipping excludes all books, movies, music and games, and is only available in the contiguous U.S.
Sears: Minimum purchase: $49 on qualifying items. Free shipping excludes items that weigh more than 150 pounds, most of which are classified under “delivery” rather than shipping.
Zappos.com: Minimum purchase: $0.01. Free shipping is limited to the U.S.
Nordstrom: Minimum purchase: $0.01. Free shipping is not available for “Nordstrom Rack” orders or on international orders.
Hidden costs?
So you’ve read the fine print, and your order qualifies for free shipping. You’re getting a great deal, right? Maybe. But it’s also possible that the retailer is making up for the cost of shipping elsewhere. Are online merchants boosting online prices to pay for the shipping promotions?
We investigated a handful of items at two mega retailers that also have store locations — Target and Walmart — and found that online prices were, for the most part, the same as the ones found in stores. In fact, both stores featured some items that were cheaper online.
Some consumers choose to shop online to avoid another cost: sales tax. But that may not be the case for long: Some states — including California, New York, Illinois, North Carolina, Connecticut, Texas and others — require online retailers to collect and remit sales tax, and other states are sure to follow.
Of course, there is also the added environmental cost of online shipping. While some say online shopping is more eco-friendly because it cuts down on trips to the store, delivery still involves transportation, mostly by truck or airplane, and often includes wasteful packaging. However, some retailers are making an effort to be sustainable: Nordstrom, for example, says its “green shipping” method makes use of “slightly used” shipping boxes.
The bottom line
There are many reasons to shop online, and free shipping is certainly an added bonus. Retailers have to turn a profit, and they can often take advantage of consumers’ hunger for a deal. But by reading the fine print and learning about restrictions before placing an order, online shoppers can make sure “free shipping” is, indeed, free.
Related stories on MNN:
- 10 holiday budgeting tips
- Is Amazon Prime eco-friendly or wasteful?
- What does 'sustainable supply chain' mean for the planet?
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I've enjoyed Amazon Prime but not sure if its worked out to be a great deal for me...I don't ship that much and was taking it for the free movie/TV and Kindle rentals...but then discovered that very little i want to read/view is available via the service.
Sorry the original post was unclear. We've corrected to clarify.
One of my family members is the prime a/c,he can include 5 name under his membership. It's a great deal for $79/yr. It's a great deal for online purchase.
I like the 5 family member part of the deal. It makes a lot of sense for our spread out young adult children. My son got the college account though so that he can use the free movie and Kindle options.
Here is how the companys can ship for free:
http://www.motherjones.com/politics/2012/02/mac-mcclelland-free-online-s...
I'm not sure where the author got her info, but I live in Alaska and often use the free shipping offered from Amazon on most orders over $25. The free shipping is one of the reasons I almost exclusively shop from Amazon as most other online sites over-charge on shipping to Alaska as a way to make more money on our purchases.
We've corrected the article for more clarity.
With one of our adult children in Hawaii, I have definitely noticed the high price of shipping to non-contiguous U.S. states. You make a great point.
I am a member of Amazon Prime. It is a great deal because I order over 50 items per year through Amazon. Their prices are very competitive and return policy consumer-friendly
I'm not sure where you found your information, but Amazon Prime is not a cardholder service? You do not need an Amazon.com card to purchase.
Sloppy writing. Amazon Prime is not a credit card. It's a program that allows you unlimited free two day shipping and access to video streaming through Amazon Video. Two minutes of research would have revealed this.
0.01 minimum purchase amount for zappos isn't really fine print or a catch.