Sometimes it’s worth paying for ‘free’ shipping
Subscriptions can make sense, but not for all
First they wanted free. Now they want fast. As shoppers turn to the convenience of cyberstores, they crave shipping that can keep up with their demands.
“For consumers, it’s one of the top things they’re looking for, and it’s a decision maker between buying at one site versus another,” says Aaron Cheris, a partner in the San Francisco office of Bain and Co., a management consulting firm.
Free shipping is expected, says Luke Knowles, founder of Free Shipping Day, a one-day, annual online-shopping event in December. On Dec. 16, 2016, more than 1,000 retailers offered free shipping and delivery by Christmas Eve.
Retailers have answered the call for free and swift delivery in different ways. Under Amazon’s subscription model, members pay a fee to get free shipping. Wal-Mart and Best Buy provide free and fast shipping if you meet their conditions.
Should you still pay for a subscription? It depends. Before you decide, consider how often you order and what you’ll get beyond shipping. Here’s what you should think about.
If your orders meet minimum-purchase thresholds, you can get speedy and free delivery without a subscription from some retailers.
Wal-Mart announced free two-day shipping on eligible orders of $35 and above on more than 2 million items in categories from food to electronics while eliminating its membership program in early 2017.
Best Buy offers free two-day shipping on thousands of items for orders of $35 and up. Apple boasts free two-day shipping on most in-stock products.
“The first battle was (over) free,” says Cheris, of Bain and Co. Now, consumers have their eyes set on two-day delivery. “One of the problems with the old, ‘I’ll get it to you in three to five days’ is, well, which is it? Is it three? Is it four? Is it five? The nice thing about two is it’s not only faster, but it’s more specific.”
Even if free two-day shipping becomes standard, don’t dismiss subscriptions. Consumers should consider other features, Cheris says.
For instance, a membership at shopping service ShopRunner unlocks free
two-day shipping on eligible items at hundreds of participating retailers. After a 30-day free trial, the fee is $79 a year or $8.95 a month.
Amazon Prime is perhaps the best known of all programs. After a 30-day free trial, members pay $99 a year or $10.99 a month to get free two-day shipping on more than 50 million items, plus free same-day and two-hour delivery on household goods, groceries and other items in select cities. Shoppers also get video and music streaming.
“The reason people join is for the free, fast shipping, but the reason they stay is because a lot of them get attached to other stuff, whether it’s Prime Now or Prime Pantry or Prime Instant Video,” Cheris says.
See if you can share your membership and split the price. At Amazon, two adults can form an Amazon Household to share select benefits of Prime, like free shipping and photo storage.
A membership to online marketplace Google Express can be shared with one person in your household at no additional cost. After a three-month free trial, the program costs $95 a year or $10 a month for free same-day delivery on eligible orders.
When shopping without a membership, ensure that a retailer with free shipping isn’t charging more for its products than what you would save on shipping.
For example, a pair of Nike running shoes recently sold for $48.75 at J.C. Penney with $8.95 shipping, for a total of $57.70 before tax. The same item came with free shipping at Zappos for $65.
It’s a matter of what you buy, too, says Mabel McLean, a director of client strategy at L2, a New York-based company that tracks brands’ online performance.
If you make frequent online purchases of items such as paper towels and cleaning supplies, shipping charges can add up, so investing in a subscription may be better.
“It depends on how frequently you shop the category,” McLean says. “I think paying seven bucks for shipping when you’re buying clothing and maybe only order online five times a year, that’s a little bit more palatable than higherfrequency categories.”
This article was provided to The Associated Press by the personal finance website NerdWallet.