When stores raise their free shipping limit from $80 to $100, they often see their total sales absolutely tank.
March 13, 2026
Original Paper
How to (and How Not to) Increase Free-Shipping Thresholds: Evidence from Online Retail
SSRN · 6297139
The Takeaway
While stores assume a higher threshold will force shoppers to add one more item to their carts, it often triggers a psychological 'giving up' point. Shoppers who see the new target as unreachable tend to remove high-value items or abandon their carts entirely because the effort to 'top up' feels too high.
From the abstract
Problem definition: Contingent free shipping (CFS) policies are widely used by e-commerce platforms to encourage larger cart values, yet platforms increasingly struggle with how to adjust these thresholds in response to rising fulfillment costs. This paper examines how increasing the CFS threshold affects consumer behavior and derives conditions under which such an increase is optimal for the platform. Methodology: Using detailed transaction and clickstream data from a North American online groc