Free Shipping Day could surpass Cyber Monday as the biggest online shopping day of the year. And with more than 2,000 online merchants participating, it seems like a great time to make the most of the promotion. But is it?
It may be if you're savvy, according to CBS News contributor and personal finance expert Regina Lewis.
The two words "free shipping" equate to one of the most powerful promotions online, she said. However, there are many things to watch out for when finishing up that gift list. Minimum spending thresholds, for instance, as well as free shipping on select items only or on non-sale merchandise, and hidden return shipping costs, should all be considered before hopping on the free shipping bandwagon.
Lewis noted by some estimates, 90 percent of consumers spend more when offered free delivery and -- on the flip-side -- nearly 50 percent of consumers won't go through with their online order if they run into steep fees during the checkout process. There's even a term for it -- "abandoned shopping carts." It's one of the biggest issues an e-commerce company faces, and free shipping takes that hurdle out of the equation.
So, with that hurdle out of the way, Lewis said, this Free Shipping Day may actually be bigger than Cyber Monday. "When you look at last year, Cyber Monday sales were just over $1 billion -- up 16 percent from the year prior, and Free Shipping Day was $942,000 -- up a whopping 61 percent," she said. "We'll see. Perhaps the best indicator is that fact that FedEx, which has extensive forecasting capability, says its expecting to deliver 17 million shipments on Monday -- the busiest day in the company's 40 year history -- fueled by e-commerce sales. In other words, what people order today, gets shipped Monday."
But the promotion for free shipping may not last. She explained, "Free shipping has started to be a consumer expectation. The big players, like Amazon, who have fine-tuned their distribution models, are in the best position to offer it year-round for a nominal annual fee. Other big (online retailers) offer it intermittently as a promotion. ... Free shipping will be most widely-available (on Free Shipping Day), because it is still based on standard U.S. shipping rates, which the merchants are willing to absorb. Then, it's definitely not a given and will phase out quickly. By Monday, you're going to start to run into expedited shipping charges, because retailers aren't going to be willing to absorb premium rates. Keep in mind, they have to pay the UPS and FedExes of the world. They'll pass those off to you, and you'll be boxed in if you're trying to get something under a tree in time for Christmas morning. Better hustle!"
Go to Free Shipping Day.com to see which retailers are participating.