Without Free Shipping, We're Not Buying

Online shoppers really like free shipping—and apparently, stores are willing to oblige. The percentage of online purchases that include free shipping is way up.

Per a Chicago Tribune story, 42% of online sales in 2009's third quarter involved free shipping, up from just 31% in 2008's first quarter. While the proportion of purchases with free shipping was up, overall e-sales in the third quarter of 2009 were down 2% compared to a year ago.

I'm not sure how to take this, however. It's not entirely clear whether stores or consumers should be happiest about the rise in free shipping. Have online retailers become more generous in giving free shipping? Are shoppers more inclined to purchase the minimum $25, $50, or $75 of goods that's often required to get free shipping?

Free shipping sounds great, but it can make shoppers behave irrationally. Check out this story I've referenced before (see #6 on the list), which mentions that you're four or five times more likely to make an online purchase if an item costs $5 but has free shipping as you are if the same item costs $2.50 and shipping costs $2.50.

Considering the minimum purchase that many retailers require for free shipping, this "freebie" may in fact push people to spend a lot more than they'd intended. Net result? Retailers win.