Does Free Shipping Increase Conversions? Guide for Online Shops

Free shipping has long been used as a psychological lever to drive more sales — but is it really worth it for your store? If you're running an online business and struggling with high cart abandonment or slow sales, your shipping strategy might be part of the problem.

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Types of Shipping Options in eCommerce

Let’s start with the basics. Online retailers typically use one of these models:

• Completely Free Shipping – The store covers all delivery costs, often worked into product pricing. This is the most conversion-friendly but potentially least profitable.
• Free Shipping Over a Threshold – Shipping is free only when the order value exceeds a set amount (e.g., “Free delivery over £50”). It encourages upselling and often increases average order value.
• Flat-Rate Shipping – The customer pays a fixed shipping fee regardless of basket size or location. It’s simple but can deter customers with small baskets.
• Variable Shipping Based on Weight/Location – Dynamic pricing based on customer location, item count or parcel weight. It’s fair but complex — and often leads to checkout drop-offs.

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What the Data Says: Shipping & Conversion Rates

According to the Baymard Institute, 48% of cart abandonments occur because of unexpected extra costs like shipping fees (baymard.com). Free delivery, even if it’s conditional, can significantly reduce this friction.

A report by Invesp reveals:

• 93% of online buyers are encouraged to buy more products if free shipping is available.
• 58% add more items to their cart just to qualify for free shipping.
  (invespcro.com)

Even if your margins are tight, offering limited-time free shipping promotions can act as a powerful sales booster. In fact, RetailMeNot found that promotions involving free shipping outperform percentage-based discounts, especially during off-peak seasons or holidays.
(retailmenot.com)

Industry Differences: What Works Where?

Conversion and delivery expectations can vary by industry:

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(Source: InMotion Hosting)

Takeaway: If you're selling furniture or heavy items, free shipping might feel unrealistic. But even here, offering free local delivery or threshold-based free shipping (e.g., over £500) can convert hesitant buyers.

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How Much Is Too Much? Psychology of Shipping Prices

Customers are surprisingly price-sensitive when it comes to delivery. A study from UPS showed that:

• 75% of shoppers say they prefer free shipping over faster shipping.
• Conversion rates drop significantly when delivery is over £5.
  (ups.com)

Here’s how price sensitivity typically breaks down:

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Smart Ways to Use Free Shipping Without Killing Margins

• Set a threshold just above average cart value (e.g., if your AOV is £42, offer free shipping over £50).
• Bundle products to create higher-margin packages that cover delivery.
• Use free shipping as a time-limited promotion to increase urgency.
• Offer local pickup or local free delivery only, especially if you operate in a smaller region.

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Real-World Case Example

One of our clients — a mid-sized online furniture retailer — offered standard £6.99 delivery and was struggling with abandoned checkouts. We introduced a campaign offering free delivery on all orders over £400. Not only did it increase the average order value, but conversion rates rose by 19% within the first month, and abandoned checkouts dropped by nearly 30%.

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When NOT to Offer Free Shipping

Free shipping isn’t always the answer. You may want to hold off if:

• Margins are razor-thin
• You’re shipping internationally
• You’ve already built trust through fast, low-cost delivery

But even then, you can test performance by:

• Offering free shipping for first-time buyers
• Creating free delivery vouchers via email campaigns
• A/B testing different delivery models

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Time to Decide: Should You Offer Free Delivery?

If your online shop is struggling with conversion rates or losing customers at checkout, your shipping strategy might be the culprit. Free delivery — whether all the time, on a threshold, or as a limited promo — remains one of the most effective ways to increase conversions without slashing your product prices.

Want to know which model fits your business best? At Ace It SEO, we help online stores not only attract traffic but also turn visitors into paying customers. Let’s talk about improving your checkout flow, increasing conversion, and using data to make better shipping decisions.