Is free shipping really free?
Someone's got to pay for it, right? Here we dive into the fine print and dish on the details.
Wed, Dec 04 2013 at 3:01 PM
Now that Black Friday is thankfully a thing of the past, for this year at least, we can get back to regular old holiday shopping. Yet as the digital age has firmly established its influence on our habits, gift shopping for many happens at the Mac, not the mall. Shopping online is clearly more convenient (and some say greener), and if you know what you want and don’t require the touching-smelling-seeing part of selecting a gift, it can be great; but it often comes with the added expense of shipping.
But as any savvy shopper knows, many of the larger retailers offer free shipping. Yet as any savvy shopper also knows, the fine print may betray the offer; minimum spending requirements and annual fees can sometimes be part of the deal. In the end, is it really worth it?
Amazon.com was the first large retailer to create a free-shipping system with its Amazon Prime program. After that, other retailers were compelled to follow suit — even though retailers with a brick-and-mortar presence risk the loss of impulse purchases when they entice shoppers to buy online rather than at their stores.
Nonetheless, in 2010 Walmart dropped its minimum-purchase requirement for free shipping on holiday shopping, vowing not to raise prices to offset shipping and not to strong-arm shippers to absorb the costs; and most other giant stores have made similar concessions. That said, the big stores already have low-price contracts with shippers, and with multiple distribution centers across the country, shipping distances and costs are already reduced. In fact, according to a story in The New York Times, air shipping prices for big retailers are about 70 percent less than what a small company would pay. Even so, money is still spent for free shipping, either by the retailer or by the shopper. Here’s how it breaks down.
The granddaddy of free shipping, Amazon broke away from the pack when it debuted Amazon Prime. Although the company had previously offered free standard shipping on purchases of more than $25 of eligible merchandise, those enrolled in Amazon Prime get free two-day shipping on eligible items with no minimum purchase (members also get free Prime Instant Video, and the Kindle Owner's Lending Library) – all for an annual fee of $79. Does it pay to enroll? It depends on how often you shop at Amazon. Shipping prices vary by department, but for shipping in the contiguous United States, they run from $5.99 to $12.49 per shipment, plus a per-item charge of .59 per pound to 2.99 per item, according to the website. If only some of the items you select are eligible for Prime, you still have to pay for shipping of those items, and some items may only be entitled to standard shipping because of their size, weight or other shipping characteristics. That said, up to four additional family members living at the same address can use the same Prime account, which may provide significant savings if you have an active shopping, video-viewing, or Kindle-reading household. (Read more: Is Amazon Prime eco-friendly or wasteful?)
Minimum purchase promotions
"Free shipping with a minimum purchase of ..." is the subtle twist that retailers use to entice shoppers to buy more than they may have planned on. Human nature makes it hard to spend, say, $8.99 on shipping when another $10.99 item would make it free. But that can be a slippery slope, and it adds up quickly. You can avoid the trap of constantly upspending by consolidating your shopping to fewer retailers and/or fewer orders.
Amazon minimum purchase
In October 2013, the minimum purchase for free shipping at Amazon was bumped to $35, an increase of $10 over the minimum the company has offered for more than a decade. Unlike Prime’s two-day shipping, the minimum-purchase shipping is standard and will be delivered in five to eight business days, after all of your items are available to ship. The minimum purchase must be met with qualifying merchandise, must exclude gift wrap and taxes, and items that are shipped by individual sellers and not fulfilled by Amazon aren't eligible.
Walmart minimum purchase
Walmart offers free shipping with a $35 to $50 minimum on eligible orders, depending on whether or not they are running a promotion; it includes “value” shipping which takes six to nine days, but you can upgrade to standard shipping (three to five days) for $2.97. As well, they sometimes offer a special shipping rate of $0.97 on some items.
Target minimum purchase and cards
The minimum purchase requirement at Target it $50, based on the subtotal of eligible items and does not include non-eligible items, GiftCards, eGiftCards, gift wrap, tax, or shipping and handling charges.
Target also offers free shipping if you use one of the company's credit cards, which include the REDCard (Target Credit Card, Target Visa Credit Card or Target Debit Card); and while there is no annual fee for these cards, they pack a hefty APR and potential late fees.
Sears and K-Mart: Shop Your Way Max
Similar to Amazon Prime, the Shop Your Way Max is an annual membership ($39 per year) in which members receive free standard shipping on many items, free two-day shipping on qualifying items, and cheap shipping upgrades, all without minimum purchase. Members also earn points for purchases. If you don’t want to join, many items throughout the sites come with free shipping without a minimum-purchase requirement.
Overstock.com minimum purchase and Club O
Overstock.com offers free standard shipping everyday on orders of more than $50 sent to the lower 48 states; orders less that $50 cost $2.95 for shipping.
Overstock.com also offers free shipping for its Club O members, and the cost of an annual membership is $19.95. The membership is a rewards program that gives Club O Dollars with each purchase, and if you fail to earn enough Club O Dollars during the year to cover the annual fee, the company will reimburse you the difference; the only catch is that the difference won’t be credited until you have paid for your Club O Membership for the following year.
The Gap, Banana Republic, Old Navy, Athleta, Piperlime
The giant Gap, Inc. family offers free holiday shipping with a minimum $50 purchase, except for Piperlime, which has no minimum.
Williams-Sonoma, Pottery Barn, West Elm
Williams-Sonoma, Inc. and its spawn have various promotions offering free shipping on certain items throughout the year. And shoppers can also always have free shipping at the Williams-Sonoma site when using the Williams-Sonoma Visa Card; the card has no annual fee and does acrue reward points, but as with all credit cards, you incur the risk of overspending, interest fees, and late charges if you aren’t careful.
The online shoe mega-store offers free shipping and free returns all the time, on all domestic orders.
It would be impossible here to list all of everyone’s smaller independent stores, but that’s not to say they don’t have free shipping offers of their own. In a bid to compete with the big guys, many have special holiday offers for free shipping. Check with your favorite small retailer and see what's available.
And of course don’t forget, if you visit a mom-and-pop in person, shipping charges won’t even be a consideration. The same goes with handmade presents and awesome offbeat charity gifts.
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