Tag Archives: innumeracy

Free shipping: why it sucks for you

I’m not kidding.

In the modern-day online economy, free shipping has almost become a baseline expectation. I am told that if I’m selling online, and I don’t offer free shipping, I might as well write off every customer under forty. That is tantamount to telling me that every customer under forty is innumerate.

I don’t believe that. But I do believe that some customers, at all ages, refuse to do the simplest arithmetic.

To be fair, free shipping is an acceptable deal–for one item, from one vendor at a time. To be clear: that makes it a wash, not an advantage.

(This, by the way, is the first in a new category of posts at The ‘Lancer: “Robin Hood.” I intend to use this category for public service articles meant to expose ripoffs and scams, and to suggest creative ways to make life worse for ripoff and scam artists. Pyle’s The Merry Adventures of Robin Hood was my absolute favorite book growing up, and over half a century later is still a great inspiration to me.)

The ripoff comes when you buy more than one item from the same vendor. The more you buy, the more you inflate the vendor’s profit. The better a customer you are, the more you suffer. The vendor counts upon you to be an idiot. He hopes you will think: if there’s free shipping, hell, why not stock up?

Let’s take a fairly common vintage baseball card as an example. Suppose it costs $1.50 with free shipping with Vendor Joe. With another, Vendor Jill, it costs $0.75 with $0.75 also for shipping. In the second case, if you buy multiple items, Jill may readily agree to combine your shipping costs to a degree. (Since this is Jill’s moment of victory, if Jill did not, Jill would demonstrate the intellect of a prehistoric fern.) Joe’s shipping charges can’t go below zero, so Jill is sure to be the better deal. No matter what, when you get this so-called free shipping, you are absolutely being charged for the freight; the cost is just relocated to the item’s price.

That card costs either vendor fifty cents to mail, but appearances drive this whole monte game. In essence, Jill charges you the fifty cents plus a modest handling fee. Jill appears petty and pecuniary and nickel-and-diming. For gods’ sake, her shipping costs as much as her merch! What does she think I am, independently wealthy? Joe looks as if he waves a magnanimous hand and throws in the cost of delivery, just to do you a favor, fagedaboudit, good ol’ Joe.

Same amount. Same shipping. Same economics–except that you like Joe better. He’s the free shipping person! And when you buy two cards, your brain may think that the more you buy, the more you save, but you can see from this description that it is the other way around: the more you buy, the more you overspend. Suppose you buy ten cards in that price range. Obviously, they cannot all be shipped for one $0.75 shipping charge, but they surely can be shipped for far less than $7.50. Since Jill has not been lobotomized, she knows it costs less than $7.50. Jill also gives you credit for not having been lobotomized, so she presumes you know this as well. So she charges you perhaps $4.00, which still covers her overall shipping plus a little extra: total, $11.50.

Joe can’t lower shipping costs below free, so unless he offers a volume discount, his ten cards cost you $15.00. And whatever his volume discount, it is unlikely to beat Jill’s simple and fair charge.

Fagedaboudit.

Why doesn’t everyone go to Jill for their bulk buys? Joe counts upon your negative emotional reaction to Jill’s method, which appears to be dinging you for every little thing à la carte. (You mean I have to pay for extra sauces?) Also, you have to ascertain in advance what her policy will be, and that requires icky work-like stuff like reading and asking her questions. There is also addition and subtraction in play, which is math, thus even ickier and difficult and wasn’t on the test. It’s all so hard, and you just want to be done! The five-second instant gratification cycle has passed! Joe is hosing you, but you like him better, because he doesn’t quibble over petty stuff like shipping charges. Bing, bang, done, oh, I have a text coming in.

It’s a shell game. Ever seen those? Pick which coconut half (or overturned bowl, whatever) the ball is under. You always win the first time, just like a monte game. Or a nearby shill steps up and ‘wins’ to make it look good. When there’s more on the line, there is no way you win because the target has been moved in a way your eye will not track.

For one item, free shipping is a wash. Take it for gospel that the vendor pays for and is being paid for the shipping, whatever shell the money is under. Beyond one item, with the same vendor, the equation is simple:

The more you shop, the more you’re milked.

Joe really, really, really hopes you will never figure this out.

Ah, but what if Jill screws you by only discounting shipping a little bit?

First, this would defeat our non-lobotomized premise about Jill, because Jill would be stupid not to know she’s dealing with someone who has figured out the shell game and has chosen her on the logical presumption of better value. Jill is honest enough not to use the free shipping ripoff. Second, and consequently, Jill knows that she has a volume customer who may buy significant amounts from her in the future–but not if she gouges on the shipping. Once that customer trusts her to keep freight charges within reason, she will be a preferred vendor.

Joe? Fagedaboudim. Jill rocks. Joe’s running game on his customers.

Free shipping: just another shell game to make people think they got a bargain when in fact it’s a wash for one item, and a ripoff for more than one.

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