The Effect of Flat Shipping Fee and Free Shipping Threshold on Consumer Evaluations

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.



Citation:

Nevena T. Koukova, Joydeep Srivastava, and Martina Steul-Fischer (2011) ,"The Effect of Flat Shipping Fee and Free Shipping Threshold on Consumer Evaluations", in E - European Advances in Consumer Research Volume 9, eds. Alan Bradshaw, Chris Hackley, and Pauline Maclaran, Duluth, MN : Association for Consumer Research, Pages: 521-522.

Authors

Nevena T. Koukova, Lehigh University, USA
Joydeep Srivastava, University of Maryland, USA
Martina Steul-Fischer, University of Erlangen-Nuremberg, Germany



Volume

E - European Advances in Consumer Research Volume 9 | 2011



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