In short
Usually yes on conversion rate, and that is not the same as yes on profit. Delivery charges appearing late in the process are one of the most common reasons a checkout is abandoned, so removing or capping them tends to lift completion. The cost is that you now absorb the shipping on every order, including the ones that would have paid it. A threshold is the usual compromise, and the right threshold comes from your own basket distribution and margin rather than from a round number.
The conversion effect is real, and it is mostly about surprise
Shoppers form an expectation of what an order will cost while they browse. A delivery charge added at the last step breaks that expectation, and a broken expectation at the moment of payment produces abandonment out of proportion to the amount of money involved.
That is why the same charge presented early does less damage than a charge revealed late. A store that shows delivery cost on the product page loses some shoppers there, and keeps the ones who reach checkout. A store that hides it until the final step keeps everyone until the last screen and loses more of them at the point where they were closest to buying.
So part of what free shipping buys is not the money, it is the removal of a late surprise. Some of that benefit is available without giving away the shipping revenue, simply by stating the cost earlier and clearly.
The rest is genuine price sensitivity. Delivery charges are perceived as a fee rather than as part of the product's value, and shoppers resist them more strongly than an equivalent increase in the product price.
A threshold turns the cost into a basket-building tool
Unconditional free shipping pays out on every order. A threshold pays out only on the orders that grew to reach it, and it changes shopper behaviour on the way there, which is why it is the usual answer for stores that cannot absorb the cost outright.
Set it from your own data. Look at the distribution of order values, not the average, and find where the mass of orders sits. A threshold placed slightly above the bulk of your current baskets encourages the common order to add one more item. A threshold placed far above them is ignored, and a threshold below them is a discount on orders that already qualified.
Then check the margin on the additional item. The threshold only pays if the contribution on what customers add exceeds the shipping you now absorb, and on a catalogue where the cheap add-on items are also the low-margin ones, it may not.
And make it visible. A threshold nobody sees does nothing, so it belongs on the product page, in the cart with the remaining amount stated, and in the announcement area. The cart message that says how much more is needed is the part that actually changes basket size.
Weight, size and geography decide whether it is affordable
Shipping cost is not uniform across a catalogue or a country. A light accessory and a heavy piece of furniture cannot sit behind the same threshold, and a customer in a remote region costs far more to serve than one in a city.
Handle that with rules rather than by picking a threshold that averages everything. Shipping profiles let you exclude bulky items, apply a different threshold by region, or charge a surcharge on oversized goods while keeping free delivery on the rest.
Cross-border sales need particular care, because duties and import taxes can arrive after the fact and undo whatever goodwill free shipping created. Where you sell internationally, deciding whether duties are prepaid at checkout is a bigger conversion question than the shipping line itself.
Returns belong in the calculation too. In categories where a meaningful share of orders come back, free outbound and free return shipping on the same order can consume the entire contribution, and the threshold has to be set with that expected cost included rather than on the outbound leg alone.
Test it properly before you commit
Run it as a change you can reverse and measure at the level of revenue per session rather than conversion rate alone. Conversion rate will almost certainly improve; the question is whether the extra orders and larger baskets covered the shipping you gave away.
The cleanest measurement compares contribution per session before and after, over periods long enough to be comparable and without a sale in either. If your traffic mix moves between the periods, segment by source so the comparison is like for like.
Where you can, test the threshold rather than the principle. Two thresholds compared against each other answer a more useful question than free shipping against no free shipping, because most stores have already decided they need some form of it.
Then revisit it when carrier rates change, when the catalogue changes, or when average order value drifts. A threshold set two years ago against an older basket profile is usually either leaving money on the table or costing more than it returns.
Setting a threshold from basket data
- Median order value now
- $46
- Share of orders between $46 and $60
- Large
- Average shipping cost per order
- $7.80
- Contribution margin on typical add-on item
- 42 percent
- Threshold considered
- $60
- Extra spend needed by a median order
- $14
- Contribution on that $14
- $5.88
- Verdict
- Marginal, so test $55 and $65 against each other
Illustrative figures. The arithmetic in the last three rows is the part worth copying, because it shows whether the added basket actually covers the shipping being absorbed.
Related questions
Is it better to raise prices and offer free shipping?
Often, for stores with a narrow price range and light products, because shoppers judge a delivery charge more harshly than a slightly higher product price. It works less well where your prices are compared directly against other sellers of the same item, since the higher price is visible in that comparison and the shipping is not.
Where should the free shipping threshold be shown?
In three places at least: the product page, the cart with the remaining amount stated, and wherever your site carries an announcement. The cart message showing how much more is needed is the one that changes basket size, so it needs to update as items are added.
Should returns be free as well?
It depends on your return rate and margin. Free returns reduce hesitation at purchase and raise the number of items that come back, and in categories with fitting risk both effects are large. Model it as a cost per order using your actual return rate rather than treating it as a policy decision alone.