"You're scrolling through an online retailer, like Amazon, Shein or eBay, and spot a shirt on sale for $40. You add it to your cart, but at checkout, a $10 shipping fee suddenly appears. Frustrated, you close the tab. But what if that same shirt was priced at $50 with free shipping? The likelihood that you would have bought it without a second thought is much higher."
"In behavioural economics, zero is not just a lower price; it flips a psychological switch. When a transaction involves a cost, we instinctively weigh the downside. But when something is entirely free, we experience a positive emotion and perceive the offer as more valuable than it is."
Retailers employ sophisticated marketing strategies to obscure shipping costs from consumers. The concept of free shipping creates a psychological advantage over displaying the true total price upfront, even when both scenarios cost the same amount. Behavioral economics shows that zero triggers a positive emotional response, making offers appear more valuable than they actually are. COVID-19 accelerated e-commerce adoption and consumer expectations for free delivery. However, shipping physical goods always carries real costs that retailers ultimately pass to consumers through hidden fees or inflated product prices. These psychological pricing tactics influence purchasing decisions more effectively than transparent pricing models.
Read at www.independent.co.uk
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