The math works out solidly in favor of the retailers. Stores that offer free shipping -- whether as a regular policy, a prepaid club or a special promotion – sell a lower average number of items per order, but consumers come back more often, says David Bell, a professor of marketing at the Wharton School of the University of Pennsylvania. Also, joining a shipping club discourages shoppers from comparison shopping. “You’re going to go where you’ve already got free shipping,” says Karen Machleit, a marketing professor at the University of Cincinnati. The psychological effect is that you’ll actually spend more with that retailer in the long run, and maybe in the short-term, too, if you’re adding filler items to push your order above the free-shipping threshold.
Three things to do.
1. Before you sign up, review your online and in-store purchases from the retailer in question -- and its competitors -- over the past year. If there’s a convenient store nearby, or if sales and price differences led you to spread recent purchases among several retailers, a shipping club doesn’t make sense. At Amazon you’d have to order 27 DVDs with a $2.98 shipping charge per disc, or 16 video games with a $4.98 shipping charge, to cover the site’s $79 annual Amazon Prime membership.
2. Consider other perks. At SmartBargains.com, the $10 Smart Shoppers Club gives members access to new and marked-down merchandise 48 hours in advance. Free shipping – on most items – is standard as part of all three programs.
But “most items” does not mean “all items.”
3. Know what you're getting into. Free trials are common shipping club enticements, but as soon as the period expires, you’ll be charged. Most clubs give you 30 days to ask for a refund. But by signing up, you may also be agreeing to auto-renew – they’ll keep charging you until you explicitly tell them not to. Check the policy so that you know whether the company will contact you before charging you again in a year, or whether it’s up to you to closely monitor your credit card statements.
3. Know what you're getting into. Free trials are common shipping club enticements, but as soon as the period expires, you’ll be charged. Most clubs give you 30 days to ask for a refund. But by signing up, you may also be agreeing to auto-renew – they’ll keep charging you until you explicitly tell them not to. Check the policy so that you know whether the company will contact you before charging you again in a year, or whether it’s up to you to closely monitor your credit card statements.
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