Shipping, Handling Charges Can Send a Consumer Into a Frenzy
Last week, I smashed into the kitchen stove with a loaded laundry basket. Off popped the front-right burner knob. The plastic cracked as it hit the floor.
Ouch. Here I was trying to complete one dreary domestic chore, and I had created another: buying a replacement knob.
The employee who answered at General Electric Appliance Part Sales told me my accident would cost $18.82: $11.85 for the plastic knob, $1.02 tax and a whopping $5.95 for shipping. Ordering from www.geappliances.com would cost the same. So there was my choice: I could use a pair of pliers to fire up the gas, or I could shell out half the cost of the part to have a replacement knob sent Fed Ex ground from Cranbury, N.J.
L.L. Bean once offered free shipping, a policy it discontinued in 1991. But as the cost of postage has risen, so have shipping and handling charges, to the point where delivery can cost more than the item. (We’re not even talking about fancy overnight options.)
Since catalog sales in the United States have been growing at twice the rate of regular retail, according to the Direct Marketing Assn., the tacked-on cost doesn’t seem to be deterring shoppers.
I did an informal survey. There is quite a range in how much companies charge to get an item into your living room. Let’s consider typical shipping and handling charges for a $150 item: L.L. Bean would charge $10.95; Garnet Hill, $11.95; Talbots, $13; Martha by Mail, $14.95; Sundance, $15.95; Smith & Hawken, $18.95; Bombay, $21.
“There is a lot of diversity in how companies set charges,” said Amy Blankenship, spokeswoman for the marketers’ association, which has 5,000 member companies. “It’s a business decision on what they want to cover. Some build it into the price of the product.” She added, “Postage, shipping or handling charges should bear a reasonable relationship to actual costs incurred.”
The best Web sites have shipping information clearly listed as a FAQ (frequently asked question), but on some you can’t find mailing or shipping charges until you take your “shopping cart” to checkout--after filling out billing address, shipping address, telephone numbers and credit-card information. Catalog Age cited research that online shopping carts were frequently abandoned because frustrated consumers had no way of deciphering shipping costs without going through the checkout. Count me in.
Also, according to Catalog Age magazine, the direct-mail industry is gearing up for a June 30 postal rate hike that increases costs 7% to 10%.
Some firms offer loyal customers a break. When L.L. Bean canned free shipping, it quietly offered it to L.L. Bean credit-card customers. From time to time, retailers offer free shipping for orders over a certain dollar amount.
The GE public-relations machine did all it could to make me feel better about paying $5.95 to send a knob the size of an Oreo. Terry Dunn, General Electric Appliances general manager for global communications, said: “This price includes the labor associated with pulling the part off a bin, packaging it up and putting a label on it and preparing it for delivery.” Dunn cited the complexities in keeping parts in stock in five major warehouses across the country for more than 200 million GE appliances. GE ships 10 million to 20 million orders a year from each warehouse. “There are a lot of carrying costs associated with this business,” said Dunn. “We make a profit on the spare part, and you expect that we would.” OK, OK. Even GE deserves to make a profit.
Blankenship pointed out that consumers shop from home for convenience and for variety not found in local stores. “You may be saving money because you aren’t spending on gas, parking or impulse buys at the mall,” she said.
I still felt ripped off. I weighed the GE envelope and knob--1.8 ounces, requiring 57 cents’ postage; the padded envelope cost about 31 cents. At a downtown Fed Ex office, I was told it would cost $3.25 to ship the knob to Cranbury. Hmm. OK, fine. I had to pay the salary of that hard-working warehouse employee.
I finally pushed the new knob onto the stove. The darn thing sticks out more than the other three knobs. Maybe I’ll just charge GE for gas to drive up there and get another one.
