Free shipping isn’t so free anymore

Free shipping is becoming a lot less free. Faced with import tariffs of up to 25%, online retailers are scaling back the perk or making shoppers spend more to get it.

Tariffs are hitting smaller direct-to-consumer brands hardest, since niche products don’t leave much room to raise prices without losing customers.

Boise-based Lovevery, which sells pricey Montessori-inspired play kits for infants and toddlers, has eliminated free shipping, and now charges ~$10 to ship a single $138 play kit.

Modern Picnic, which sells fashion lunchboxes that sell for as much as $250 has doubled the minimum price threshold to $300 from $150 or given customers the option to pay a $15 shipping fee.

It’s not just smaller retailers adjusting their shipping policies. Major brands like Macy’s (NYSE:M), Abercrombie & Fitch (NYSE:ANF), Neiman Marcus, and Saks Fifth Avenue have all modified their free-shipping thresholds. Meanwhile, Temu (NASDAQ:PDD) has amended its free-shipping policy by charging $2.99 per merchant for U.S. orders – meaning an order fulfilled by four different sellers could rack up nearly $12 in shipping costs, despite appearing as a single purchase to the customer. The company still offers free shipping, but only if the order comes from a single seller and is more than $30.

Some retailers are holding onto their free-shipping policies but adjusting prices elsewhere. Walmart (NYSE:WMT) Best Buy (NYSE:BBY) and Target (NYSE:TGT) will continue to ship online orders over $35 for free but have indicated that prices will go up to counteract the higher cost of merchandise from China. Nike (NYSE:NKE) will continue to give customers who spend $150 free shipping but also raised some of their prices beginning June 1.

How pivotal is free shipping to a merchant’s success? It’s considered “the biggest reason people abandon a cart,” said ShipMatrix president Satish Jindel as quoted by the Wall Street Journal.

“To not have free shipping with any threshold is a recipe for a serious decline in sales,” Jindel adds.

According to data compiled by SellersCommerce, 48% of shopping carts are abandoned for additional costs such as shipping or taxes. This is nearly double those that are abandoned for things such as mandatory account creation and slow delivery speed. And the abandonment rate is closely linked to low-value orders. When shipping fees exceed the value of the merchandise, shoppers often look elsewhere.

And that leads back to Amazon (NASDAQ:AMZN). Still the dominant force in fast, free delivery, Amazon hasn’t altered its shipping policies. However, some third-party sellers on its marketplace are raising prices to offset rising tariff costs. According to SmartScout, prices have increased by an average of 30% on nearly 1,000 items. The result: fewer impulse purchases and a shift in consumer behavior as shoppers seek out more affordable alternatives.

Retailers now face a tough choice: absorb higher costs or risk alienating customers with added fees. In a world where one click can send shoppers elsewhere, free shipping may still be the hook—but it’s no longer the bargain it once seemed.