The real cost of “free shipping”

Offering free shipping too early can shrink your margins without boosting conversions. Here’s when it helps and when it just costs you.

Author

Brian Schmitt
November 16, 2025

Why ‘Free Shipping’ Isn’t Always the Right Move

Free shipping sounds like a win.

It’s frictionless. It’s popular. It’s expected.

So most teams push it front and center thinking it’ll drive more conversions.

But it doesn’t always work like that.

Sometimes, offering free shipping too soon actually reduces your average order value. Or tanks your margin without lifting conversion.

Because it removes an important decision point from the shopper’s journey.

Win of the Week:

The Power of the Threshold

In a recent test, a brand added shipping clarity to their PDPs.

If the product already qualified for free shipping, they called it out.

If it didn’t, they told the user how close they were to unlocking it.

The result?

  • +2.5% add-to-carts

  • +4.9% transactions

  • +3.1% AOV

  • +10.4% RPV

  • +$412K in projected annual revenue

But here’s the nuance:

There wasn’t a lift on higher-priced items that already crossed the shipping threshold.

The lift came from people buying more to get free shipping.

Because the messaging gave them a reason to add something to their cart.

Not just feel good about what was already there.

Quote of the week:

The tricky balancing act for marketers is to create content that simultaneously brings value to an audience and delivers a branding message. If the content is too promotional, it will turn off the audience. If the content doesn’t link closely enough to the brand, it may not be seen as effective.

Tom Fishburne (via The Marketoonist) - it’s from 12 years ago, but feels just as relevant today

So when is free shipping a smart move?

✅ When it encourages cart building

✅ When it gives users a goal

✅ When it’s presented with timing and clarity

But…

❌ When it’s automatic from the homepage

❌ When it erodes your margin without increasing AOV

❌ When it’s treated as a default instead of a lever

Free shipping is powerful.

But like any lever, it has to be used intentionally.

Don’t default to it.

Design around it.

Looking forward,

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