Free shipping isn’t just a perk—it’s a purchase driver. In fact, 75% of shoppers prioritize free shipping over fast shipping according to FedEx data (although they’ll happily take both if it’s on offer),
Shipping fees are one of the main reasons customers abandon their carts; overall, the shopping cart abandonment rate stands at about 70%.
There’s a reason customers love free shipping so much they’ll purchase additional products to avoid a shipping fee. Learn about the psychology behind a free shipping strategy, so you know when and how to deploy it—profitably.
Free Shipping and Fulfillment Kit
Simplify your shipping process and ensure your products reach customers on time. This free toolkit provides essential tips and resources to help you manage logistics efficiently.
What is free shipping?
Online retailers use free shipping to cover delivery costs, reduce cart abandonment, and increase conversion rates. The shipping fee doesn’t get levied onto a customer’s order at checkout—online shoppers know that the price they see on a product page is the amount they’ll pay, plus any applicable taxes.
Why offer free shipping?
The age-old question of whether free shipping increases sales is best answered by looking at the data:
Free shipping increases sales
More than eight in 10 consumers cite free shipping as their top priority when purchasing a product online. Shoppers believe they’re getting a better deal when they don’t have to pay for shipping costs, and will add more items to their carts to qualify for it. Plus, offering free shipping can help you build trust with your customers.
Free shipping increases average order value
A free shipping threshold can boost your average order value (AOV). For example, if customers spend an average of $35 and you set the free shipping threshold at $50, you can increase the average amount customers spend.
As many as 80% of online shoppers are willing to meet a minimum purchase threshold to avoid extra shipping costs. Many customers prefer adding a $10 item to their cart instead of paying $7.99 for shipping. Even though they’re spending more, they feel like they’re getting more value by purchasing an additional item than paying for shipping.
Free shipping reduces cart abandonment
In 2025, 39% of online shoppers cite extra costs, which include shipping costs, as the reason they abandon their carts. If a potential customer hits checkout and sees a shipping charge, they’re likely to exit your website right then. However, if you offer free shipping, your shoppers are much more likely to complete their purchase.
Types of free shipping
There are a few ways to offer free shipping to your customers:
Site-wide free shipping
With a site-wide approach, you give every customer free shipping, whether they’re placing a small first order or returning to buy more. This can increase your conversion rate and minimize cart abandonment. However, free shipping isn’t necessarily free—someone needs to front the cost of shipping. Depending on the products you offer, you can significantly lower profit margins by offering free delivery to all shoppers.
Conditional free shipping
The most popular example of conditional free shipping is minimum order thresholds. This strategy influences shoppers to spend more to avoid shipping costs. Other conditions include people within a certain radius of your store, or for certain customer segments (such as first-time customers or loyalty program members only).
Free shipping for loyalty program members
A 2024 report found that the biggest benefit for people who sign up for a store’s loyalty or membership program is to qualify for free shipping. This alone can encourage retention and squeeze more revenue out of customers you’ve already acquired.
How to create your free shipping policy
A free shipping policy is basically a framework that tells customers how, when, and under what conditions they can expect to pay nothing for delivery. It should be simple enough for shoppers to skim in seconds, but detailed enough to answer any shipping questions they might have.
Key elements of an effective shipping policy
Cover these essentials when drafting your free shipping policy:
- Eligibility rules. Be upfront about what qualifies for free shipping. For example, it might only be applied to orders over $50 or those in the US.
- Geographic coverage. Make it crystal clear where free shipping applies. Many stores limit it to domestic orders or offer it in select regions like the continental United States.
- Delivery times. Customers want to know if “free” means “slow.” Will orders take two to three business days or five to seven? Set clear timelines for when customers should expect their orders to arrive.
- Exclusions. Make a note upfront if bulky items, heavy goods, or international deliveries don’t qualify.
- Returns and exchanges. Let shoppers know if your return process ties into your shipping offer (e.g., whether returns are free or if shipping is deducted from a refund).
Shipping policy examples from successful stores
Plenty of Shopify stores use free shipping strategically, whether that’s flat rate shipping or free shipping on orders over a certain amount.
Here are a few standouts you can take inspiration from:
Allbirds
This footwear brand keeps it simple, with free shipping on orders of more than $75. Its shipping policy can be found in its FAQ section, and clearly lays out when customers get free shipping and when they don’t.
Brooklinen
Known for its high-quality bedding, Brooklinen offers free shipping on US orders of more than $100. It’s an achievable threshold, given Brooklinen’s luxury products, but keeps average order value (AOV) higher for carts with smaller, less expensive items than a full sheet set.
Gymshark
Like Allbirds, Gymshark offers free shipping on orders over $75. It has a handy dropdown menu on its shipping information page that tells customers what they can expect depending on where they’re based.
How to cover the cost of free shipping
- Calculate profit margins
- Set a minimum order value
- Limit free shipping to select products
- Offer free shipping within a certain radius
- Negotiate discounts with shipping carriers
- Reward specific actions with free shipping
- Launch a free shipping promotion
- Consider free local pickup
Free shipping across the board might not work for your business. After all, it doesn’t work as an incentive if it puts you in the red. Here are eight ways to go about it and maximize profitability:
1. Calculate profit margins
One of the easiest ways to offer free shipping is to include the shipping cost in the price of your product. This way, free shipping is baked into every item you sell.
To make this work, calculate your profit margin to ensure free shipping won’t cut into your profits. Remember to include the cost of goods sold (COGS) and additional operating expenses like running your online store, warehouse costs, marketing, and other necessary costs to keep your business moving. You can then use the Shopify profit margin calculator to calculate.
For example, if an item costs $20 to produce and you charge $30 for it, your markup is 50%.
This means you profit $10 per product, with a gross product margin of 33.33%. To offer free shipping, you’d need to take a slight cut in your profits or mark up the products so the shipping costs are included. You could do a bit of both.
Even if your products are slightly more expensive than your competitors’ products, if they’re free to ship, you have an advantage.
2. Set a minimum order value
Another option is to offer free shipping if your customers spend a certain amount. This can be incredibly effective, considering 80% of consumers will spend a minimum amount to get free shipping.
Many brands use this strategy, like SKIMS, which offers free domestic shipping on orders over $75 on its website.
Here’s how to calculate your free shipping threshold:
- Calculate your average order value (AOV), without shipping costs (for example, $40).
- Determine your average shipping costs (for example, $8),
- Calculate your gross profit margin. To do this, subtract your cost of producing product from the total sales and divide that number by your total sales (for example, if your total sales add up $100,000 and your cost is $60,000, then the formula would be ($100,000 - $60,000) / $100,000 = 40% gross profit margin).
- Propose a minimum cart value (for example, $45).
Next, put your proposed minimum cart value to the test:
- Determine the difference between the minimum cart value and the AOV ($45 - $40 = $5).
- Multiply the difference by the gross profit margin ($5.00 x .4 = $2).
- Subtract the result from the average shipping cost ($8 - $2 = $6).
In this example, you’re going to pay $6 for shipping on qualifying orders. This is too much of a hit on your bottom line, so look to adjust the minimum cart value. Use $55 as the minimum.
- Proposed minimum cart value minus AOV ($55 - $40 = $15).
- Multiply the difference by the gross profit margin ($15 x .4 = $6).
- Subtract the result from the average shipping cost ($8 - $6 = $2).
By upping your threshold by $10, you still provide value for customers while dropping your shipping cost to just $2 per order.
Ideally, the free shipping threshold is set just high enough above your median order value (MOV) or AOV to nudge customers to add extra items to their cart, which they might not have done otherwise.
3. Limit free shipping to select products
Shipping fees for larger products can be pretty hefty, so at some point, offering free shipping won’t make financial sense. For example, it could be difficult for a furniture brand to provide free shipping to all of its customers.
However, if you sell a mixture of products, you might be able to swing free shipping on some of the smaller ones. That furniture brand could offer free shipping for things like bedding or small tables, for example.
4. Offer free shipping within a certain radius
If shipping to faraway places gets too expensive, consider offering free shipping only in certain states, provinces, territories, or countries. Location-based free shipping can be one way to appeal to a large segment of your audience—even if you can’t offer it to everyone.
Local delivery is another option that’s quick and offers a way to create a personalized brand experience. Customers who shop locally are often looking for a personal connection, and direct delivery is a great way to do it.
Alternatively, you can try to store your inventory close to where data shows your customers are buying. If you store products closer to your customers, you cut carrier costs, speed up delivery, and make free shipping more affordable.
Keep in mind that relocating your inventory will incur new storage costs that will impact your profit margins. Speak to a third-party logistics provider to better understand the costs of outsourcing the pick, pack, and shipping process.
5. Negotiate discounts with shipping carriers
No one has more control over your shipping costs than the carriers themselves—companies like USPS, DHL, and UPS that deliver your customers’ orders. Carriers ultimately determine your shipping costs, so negotiating with them is key to offering free shipping profitably.
You can connect your account to use your own rates, or let Shopify handle it for you. With Shopify Shipping, you have access to the best discounts available through exclusive carrier partnerships.
Use carriers’ shipping rates calculators
Most major carriers offer free shipping calculators on their websites. You just have to plug in the package dimensions, weight, and destination, and you’ll get an estimate of what it will actually cost to ship.
Using these tools pays off in a few ways:
- Set realistic free shipping minimums. If you know it costs you $8 on average to ship an order, setting a free shipping threshold at $50 makes a lot more sense than blindly choosing $30.
- Avoid margin-killers. Calculators show how costs vary by zone, size, and weight. That helps you decide whether to exclude bulky or international orders from your free shipping offer.
- Strengthen negotiations. When you eventually talk to carriers or third-party logistics providers (3PLs) about volume discounts, having baseline data from calculators puts you in a stronger position.
Here are the most common carriers and their shipping calculators:
6. Reward specific actions with free shipping
Use free shipping to incentivize other actions that help your business, such as:
- Creating an account
- Opting into your loyalty and rewards program
- Signing up for your email newsletter
- Following your social media accounts
- Referring your business to a friend
This free shipping strategy is ideal if your sales cycles are long or paid options are expensive. For example, if you’re selling expensive furniture, people probably won’t buy something the first time they visit your store. They need to compare their options, measure the space they have available, and discuss it with their housemate.
Use an email pop-up form that offers free shipping in exchange for their email address. This allows you to retarget that customer after they leave your site and encourage them to buy.
7. Launch a free shipping promotion
Offer free shipping for a short period of time to create a sense of urgency and boost sales.
Consider creating a promotion for one weekend every month or for seasonal events and holidays like Christmas, Mother’s Day, Father’s Day, or Memorial Day. Or, offer free shipping coupon codes for people who sign up for your email newsletter.
Alternatively, create a shipping-related discount code that lasts for a few days and promote it on your website and social media. Offer free shipping for just a few days to nudge customers who’ve been putting off a purchase to finally buy.
8. Consider free local pickup
If you can’t offer free shipping across the board, a great alternative is to give customers more flexibility in how they receive their orders that aren’t in-store purchases. Free local pickup is the obvious starting point if you have a brick-and-mortar location. It’s low cost for you, free for them, and increasingly popular with shoppers who want to support local businesses while skipping shipping fees.
But you don’t have to stop there. Today’s customers expect choices, and offering different fulfillment options can set your store apart (and improve your entire supply chain):
- Curbside pickup. This option cuts down on wait times and puts customers in control of when they collect their order.
- Locker delivery. E.g., Amazon Lockers, InPost, or UPS Access Points. Customers can pick up their packages from secure lockers at a time that suits them (often 24/7).
- Third-party pickup locations. Many carriers and retailers partner with local convenience stores, pharmacies, or gas stations to act as collection points.
- Gig-economy delivery. Platforms like DoorDash, Uber, or Postmates are branching into same-day retail delivery. They can help you offer fast local fulfillment, especially if you don’t have the staff or fleet to do it yourself.
The Shopify guide to shipping and fulfillment
Boost customer satisfaction while driving sales growth for your ecommerce business with an effective shipping and fulfillment strategy. Use this guide to create a plan that covers all aspects of shipping and fulfillment, from how much to charge your customers to choosing the right fulfillment method.
Fast vs. free shipping: what’s more important?
It can be challenging for small businesses to offer both free and fast shipping. Many brands have to choose between the two. While it can seem like a tradeoff, a recent survey found that customers overwhelmingly prefer free shipping to fast shipping.
That said, customers are under the “Amazon effect,” or the expectation that certain products will be available for free two-day shipping—even same-day shipping in some cases.
Your best bet is to offer standard shipping with a minimum purchase, then upsell faster delivery for an extra fee.
Customer expectations around free shipping
Free shipping is now part of what customers expect when they shop online, and yet only 48% of brands offer it. That’s not the only thing that’s important to shoppers—they also care about how quickly their order arrives and how convenient the delivery options are.
What customers really want from free shipping offers
Removing shipping costs at checkout isn’t enough to satisfy online shoppers. Aside from free delivery, there are other expectations around shipping that you must factor into your strategy, including:
- Speed. A DHL report found that 61% of global shoppers want next-day delivery, but they’re not willing to pay extra for it. Consider outsourcing the fulfillment process to a third-party logistics provider, like the Shopify Fulfillment Network. It connects your store with Flexport, which has the infrastructure to fulfill orders quickly, often passing on discounted rates from shipping carriers.
- Convenience. Some 16% of consumers say that convenience is the most important delivery feature when online shopping. Offer a variety of delivery options, such as curbside or in-store pickup, delivery to a parcel locker, or the ability to choose a delivery time slot.
- Sustainable shipping options. Customers increasingly factor a store’s sustainability practices into their purchase decisions. Cater to these shoppers with sustainable shipping practices like using eco-friendly packaging, removing packaging to avoid waste, and working with carriers that have an electric fleet of delivery vehicles.
- Shipment tracking. 60% of shoppers say delivery speed is not important to them as long as they are told when it will arrive. This isn’t just useful to customers—it can reduce the customer service burden of replying to “Where is my order?” questions. Shop, for example, has a native parcel tracker that sends pop-up notifications to app users at key points during the delivery process.
How free shipping affects brand loyalty
Extra shipping costs are an extra hurdle that could deter loyal customers from buying. It becomes a no-brainer to buy their favorite products again if they don’t have to pay an additional fee for shipping and fulfillment.
The same applies to returns. If first-time customers are forced to pay a fee to return an item, you’ll alienate the 41% of shoppers who only buy from retailers that offer free return shipping.
How to communicate free shipping offers effectively
The way you communicate your free shipping policy matters. Ideally, you should make the offer visible, consistent, and repeated across the right touchpoints.
Here are the most effective ways to spread the word:
- Site banners and headers. Use a sticky top banner or announcement bar that highlights your free shipping policy so shoppers can see it on every page.
- Pop-ups and slide-ins. Well-timed pop-ups can reinforce the message, especially when paired with exit-intent or cart reminders.
- Product detail pages. Shoppers often jump straight to a product page from Google or social ads, skipping your homepage. Add a note under the price or in the shipping section.
- Checkout page nudges. If you offer a threshold (say, free shipping over $75), you can include a dynamic progress bar or message.
- Email marketing. Call out your shipping policy in your welcome sequence, weave it into promotional campaigns, and highlight it during key shopping periods like Black Friday/Cyber Monday.
- SMS and push notifications. Quick reminders can give hesitant shoppers a nudge and get them to act fast.
- Social media. Use Instagram Stories, pinned posts, or TikTok captions to highlight your shipping perks.
Setting up free shipping on Shopify
Shopify makes it easy to offer free shipping.
There are several ways to do this:
Free shipping rate method
The free shipping rate method allows you to automatically offer free shipping when a customer’s order meets price or weight conditions. To do this in Shopify:
- Find the Settings tab.
- Go to Shipping and delivery.
- Locate the shipping profile you want to edit.
- Click Add Rate, give it a name, and set the value of the Price field to 0.
- Click Done and press Save.
You can also use this method to define which orders don’t qualify for free shipping if that’s something you offer as standard. For example, you could reserve free shipping for orders that are cheap to ship, such as lightweight packages that weigh less than five pounds. This method automatically removes the shipping discount if the products in a customer’s cart weigh more than this amount.
Free shipping discount codes
A free shipping discount code removes the price of shipping when an online shopper enters the coupon code at checkout.
Here’s how to create a free shipping discount code from your Shopify admin:
- Head to the Discounts tab in Shopify.
- Click Create discount.
- Choose Free shipping from the Select discount type menu.
- In the “Method” section, choose Discount code.
- Create the code manually or using the Generate code tool.
- Review the details and click Save discount.
Free shipping discount codes are great if you want to reward specific customer segments, such as first-time customers or loyalty program members. Only people who’ve received the code can redeem the free shipping offer.
The downside is that people might forget to use the discount code at checkout or only realize it was an option after they’ve paid for their order. Both can result in unhappy customers contacting support for a shipping refund.
Conditional free shipping discount
Conditional free shipping deducts the cost of shipping at checkout with an automatically applied discount code. It’s useful when you want to apply custom rules beyond just price or weight.
To do this:
- Sign into Shopify and go to Discounts.
- Choose Create discount.
- Go to Select discount type and press Free shipping.
- Choose Automatic discount.
- Create the free shipping code.
- Review the details and click Save discount.
Automatic free shipping solves the issue of unhappy customers who forgot to enter the code manually at checkout. However, it applies to everyone, so you might end up covering the cost of shipping for customers who were otherwise happy to pay an additional fee.
Configure free shipping conditions
If you’ve decided that conditional free shipping is the best strategy for your online store, Shopify lets you manage discount eligibility from the Discount tab.
For example, you could:
- Set a minimum purchase or quantity threshold
- Make the free shipping coupon exclusive to a particular segment, such as VIP or first-time customers
- Apply a free shipping coupon to specific transactions (i.e., only one-time purchases and not subscriptions)
- Set a usage limit that only lets a certain amount of customers redeem the free shipping code
- Exclude specific countries or regions for free shipping
- Configure start and end dates for a time-sensitive free shipping promotion
See more shipping resources here.
Should you offer free shipping?
Free shipping is becoming increasingly necessary to maintain customer satisfaction. You can experiment with different types of free shipping to see which one leads to the highest profit margins for your business.
Keep in mind your free shipping threshold is not a set-and-forget number; your strategy will, and should, change as your business grows. Revisit your shipping policies at key selling periods and growth milestones.
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Free shipping FAQ
Is free shipping really free?
Free shipping can be completely free for customers or come with conditions. In some cases, retailers offer free shipping on orders that meet a minimum purchase amount or get shipped to a specific geographic location. In these cases, the business owner absorbs the costs of shipping. Some retailers incorporate the cost of shipping into the product price or only require customers to pay extra shipping fees for expedited shipping options.
Do people buy more with free shipping?
Yes, people buy more when free shipping is available. Free shipping increases perceived value, reduces buyer hesitation, increases average order value, and boosts sales overall.
Does free shipping make a difference?
Yes, free shipping can change how customers view a product or service. Customers who receive free shipping are more likely to shop with a business that offers it, as it saves them time and money. Free shipping can also help increase customer loyalty and satisfaction, as customers appreciate the convenience of not having to pay for shipping.
Who pays for shipping when it’s free?
It depends. In some cases, the seller pays for the shipping when it’s free. This is typically the case if it’s a free shipping promotion for a limited time or a selection of products. If it’s always free, many businesses bake shipping costs into the product price, and the consumer actually ends up paying for it when they make the purchase.
Do customers care about free shipping?
Yes, customers care about free shipping. Many studies and surveys show that shoppers prefer free shipping to fast shipping and are open to things like minimum orders, loyalty program membership, and other requirements for free shipping promotions.
How do you calculate free shipping to offer?
Start by using carrier shipping calculators (UPS, USPS, FedEx, etc.) to work out your average cost per order, factoring in package size, weight, and destination. From there, decide whether you can absorb that cost fully or if you need to set a minimum order threshold (e.g., free shipping over $75) to protect your margins while still making the offer attractive.
How do you add free shipping on Shopify?
In Shopify, go to Settings > Shipping and delivery, then edit your shipping rates. You can create a new rate and set the price to free, either for all orders or only for orders above a certain amount. Once saved, your checkout will automatically apply the free shipping option when a customer qualifies.
