The effect of shipping fee structure on consumers' online evaluations and choice

Nevena T. Koukova, Joydeep Srivastava, Martina Steul-Fischer

Research output: Contribution to journalArticleResearchpeer-review

27 Citations (Scopus)

Abstract

This research examines how consumers respond to different shipping fee structures. Focusing on two of the most common shipping fee structures, flat rate shipping and threshold-based free shipping, we first demonstrate that offer evaluations are less (more) favorable with threshold-based free shipping when order value is below (above) the free shipping threshold compared to flat rate shipping. However, when an alternative more important referent is present, the effect of shipping fee structure is attenuated. Second, we show that although perceptions of shipping fees as a profit generator are higher (lower) under threshold-based free shipping relative to flat rate shipping for order values below (above) the free shipping threshold, providing a justification for the shipping fee by explicitly linking it to delivery costs encourages consumers to view the shipping fee as a cost of doing business rather than as a profit generator, thus raising offer evaluations.

Original languageEnglish
Pages (from-to)759-770
Number of pages12
JournalJournal of the Academy of Marketing Science
Volume40
Issue number6
DOIs
Publication statusPublished - 2012
Externally publishedYes

Keywords

  • Flat rate shipping
  • Free shipping
  • Online shopping
  • Progressive rate shipping
  • Shipping fee
  • Threshold-based free shipping

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