The Myth Of Free Shipping

How retailers hide the costs of delivery—and why we’re such suckers for their ploys

- Amanda Mull

It was a pair of feather earrings that helped Ann Miceli get out from underneath strangers’ cars. For years, Miceli had worked as an auto mechanic and picked up shifts in her spare time at Indianapolis restaurants. One day, she came across those earrings, and “it kind of sparked something.” Miceli bought a pair, and then some supplies to make her own. She listed some of her creations in a shop on Etsy and named it PrettyVagrant.

That was in 2011. In the intervening years, Miceli has sold nearly 30,000 of her handmade earrings and feather hair extensions, all of which she assembles by hand at home. After a couple of years, Miceli quit her job as a mechanic. Etsy “has given me the opportunity to work from home and watch my grandkids,” she told me. Everything was humming along nicely until last summer, when the site began implementing a new search algorithm that gives priority to sellers who guarantee free shipping. Those who charged even a few dollars, like Miceli, were removed from their spots on the first page of search results. In August, Miceli’s revenue was down 40 percent from the previous year—a huge dip that she blames on the free-shipping finagling.

Etsy said it had no choice: Buyers’ expectations had changed, and it felt compelled to respond. The company told Miceli to raise her prices to compensate for and disguise shipping fees. But when Miceli looked around, her competitors seemed to be simply eating the cost, which she couldn’t afford to do.