The Effect of Shipping Fee Structures on Consumer Evaluations of Online Offers

Nevena Koukova, Lehigh University, USA
Joydeep Srivastava, R. H. Smith School of Business, University of Maryland, USA
Martina Steul-Fischer , University of Erlangen-Nuremberg, Germany
We investigate how consumers respond to two shipping fee structures – a flat fee charge and a free shipping threshold. Building upon the reference point and fairness perceptions literature, we demonstrate that offer evaluations and choice vary systematically with the shipping fee structure employed. We demonstrate that the free shipping threshold serves as a reference point, and consumers evaluate the offer relative to it. When an alternative reference point is provided, the free shipping threshold does not play a role anymore. We also show that the free shipping threshold may act as a goal for consumers, affecting offer evaluations and choice.
[ to cite ]:
Nevena Koukova, Joydeep Srivastava, and Martina Steul-Fischer (2010) ,"The Effect of Shipping Fee Structures on Consumer Evaluations of Online Offers", in NA - Advances in Consumer Research Volume 37, eds. Margaret C. Campbell, Jeff Inman, and Rik Pieters, Duluth, MN : Association for Consumer Research, Pages: 538-539 .