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Free Shipping: Perk or Permanent?

Written by Tom Ryan

To offer free shipping on online purchases as a perk or a guarantee? That appears to be the question many retailers are asking themselves these days.

Neiman Marcus last week became the latest retailer to move to year-round free shipping and returns for all domestic online orders.

"The customer has always been at the center of the Neiman Marcus business model," said Wanda Gierhart, chief marketing officer, Neiman Marcus Group, in a statement. "Permanent free shipping and returns have been a top request and we are happy to be able to make this change just in time for the holiday shopping season."

The service also covers any orders from its Bergdorf Goodman website. In addition, Neiman Marcus said all international orders over $100 will now ship free of charge.

The move comes after competitor Nordstrom introduced free shipping and returns in 2011, although only a few majors offer the guarantee. L.L. Bean made a big splash when it offered the guarantee in March 2011. Zappos has touted free shipping and returns as a core tenant of its customer service vision.

While seemingly generous, it's not hard to find free shipping on online orders, with many retailers using them as an incentive to trigger purchase or to buy more:

  • Order amount: Gap.com offers free shipping for orders over $50. Kohl's offers free shipping on orders over $75; macys.com, over $100; and jcrew.com and anntaylor.com, both over $175. Neiman Marcus previously waved shipping fees for web orders over $150.
  • Limited time: Bloomingdales.com was running a promotion for free shipping on any online order size from Sept. 30 through Oct. 6.
  • Order amount and time period: Saks Fifth Avenue has a promotion offering free shipping with any purchase of $150 or more through Oct. 14.
  • Rewards perk: Some retailers such as DSW and Staples reserve free shipping for its rewards programs members while also offering incentives to non-members to gain free shipping.

Although gap.com appears to stand out by offering free returns for any online purchase, most retailers charge a small fee (seemingly ranging from $6.00 to $8.00) for returns of merchandise bought online.

Regardlesss, free shipping remains highly popular with consumers as shown by the just-released UPS Pulse of the Online Shopper Study, based on a survey of 3,000 U.S. consumers by comScore. Asked about areas for improvement in the online shopping experience, the number one answer was "Availability of Free or Discounted Shipping," agreed to by 54 percent; followed by "Ease of Making Returns/Exchanges," 37 percent.

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