Target slices free-shipping minimum in half to $25

  • By Marley Jay Associated Press
  • Monday, February 23, 2015 4:02pm
  • Business

NEW YORK — Target has sliced its minimum online purchase to qualify for free shipping in half to $25 as the Internet becomes a bigger and bigger sales hub for retailers.

The minimum takes aim at competitors Wal-Mart and Amazon.com, both of which have higher minimums for standard purchases, and could be another step in a slow march among retailers toward eliminating separate shipping fees.

Target said free shipping is now available to all online orders coming from the continental U.S. or from military postal facilities. The company says handling fees may still apply to some orders.

Amazon and Walmart may follow suit or cut their minimums even further, said Brian Sozzi, CEO and chief equities analyst for the research firm Belus Capital Advisors.

“The U.S. consumer now views free shipping as a right,” said Sozzi. He said he thinks retailers will do away with the charges altogether in a few years. They can do that, Sozzi said, because they are building more distribution centers, which makes it easier and cheaper to ship items.

“For now, there has to be a minimum,” Sozzi said in a telephone interview. “Over time, I think you’ll see the companies use their data better and open up more distribution centers, so this minimum won’t be in play.”

Target began offering free shipping for Target.com orders worth $50 or more in June, and it offered free shipping on all items over the holiday shopping season. Target also provides free shipping on most online purchases for shoppers who participate in its REDcard loyalty program.

Amazon offers free shipping in the U.S. for some items when the value of the order exceeds $35, for those without a free-shipping Prime membership.

Customers who order more than $50 worth of merchandise from Wal-Mart Stores Inc.’s website can get free shipping if they’re willing to wait six to eight days for delivery.

Target and Walmart also allow customers to have their orders delivered to stores for free.

Marshall Cohen, chief retail analyst for the market research firm NPD Group, said online retailers like Amazon are forcing companies like Target, which runs physical stores, to change their methods.

“Online (retailers), because of their advantage of generally lower overhead, gives them the ability to change the rules of engagement,” he said. “Now the stores are learning that they have to play by the same rules to keep the consumer engaged.”

Cohen said that eliminating shipping charges will also help online retailers because it will allow them to increase impulse sales. Right now, he said, online shoppers can suffer sticker shock when they see shipping and handling charges added to their bills. If shipping charges go away, consumers will spend more on impulse items.

Amazon Prime customers can get free shipping on many items, and so can members of services like Overstock.com if their orders are large enough. Those programs charge an annual membership fee: $99 a year for Amazon Prime, and $19.95 for Overstock.com.

Target has been working to win back customers since a 2013 data breach in which hackers stole millions of customers’ credit and debit card records. Target’s reputation took a hit and the company is facing lawsuits from consumers and financial institutions.

The company announced in January that it will close all 133 of its Canada stores because they were struggling and losing money. Target said it expects to take a fourth-quarter charge of $5.4 billion in connection with the closings.

Shares of the Minneapolis-based retailer fell 30 cents to $76.57 in afternoon trading. Target stock set an all-time high of $77.75 in January.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Business

Black Press Media operates Sound Publishing, the largest community news organization in Washington State with dailies and community news outlets in Alaska.
Black Press Media concludes transition of ownership

Black Press Media, which operates Sound Publishing, completed its sale Monday (March 25), following the formerly announced corporate restructuring.

Maygen Hetherington, executive director of the Historic Downtown Snohomish Association, laughs during an interview in her office on Thursday, Feb. 15, 2024, in Snohomish, Washington. (Ryan Berry / The Herald)
Maygen Hetherington: tireless advocate for the city of Snohomish

Historic Downtown Snohomish Association receives the Opportunity Lives Here award from Economic Alliance.

FILE - Washington Secretary of State Steve Hobbs poses in front of photos of the 15 people who previously held the office on Nov. 22, 2021, after he was sworn in at the Capitol in Olympia, Wash. Hobbs faces several challengers as he runs for election to the office he was appointed to last fall. (AP Photo/Ted S. Warren, File)
Secretary of State Steve Hobbs: ‘I wanted to serve my country’

Hobbs, a former Lake Stevens senator, is the recipient of the Henry M. Jackson Award from Economic Alliance Snohomish County.

Mark Duffy poses for a photo in his office at the Mountain Pacific Bank headquarters on Wednesday, Feb. 14, 2024 in Everett, Washington. (Annie Barker / The Herald)
Mark Duffy: Building a hometown bank; giving kids an opportunity

Mountain Pacific Bank’s founder is the recipient of the Fluke Award from Economic Alliance Snohomish County.

Barb Tolbert poses for a photo at Silver Scoop Ice Cream on Thursday, Feb. 29, 2024 in Arlington, Washington. (Annie Barker / The Herald)
Barb Tolbert: Former mayor piloted Arlington out of economic brink

Tolbert won the Elson S. Floyd Award, honoring a leader who has “created lasting opportunities” for the underserved.

Photo provided by 
Economic Alliance
Economic Alliance presented one of the Washington Rising Stem Awards to Katie Larios, a senior at Mountlake Terrace High School.
Mountlake Terrace High School senior wins state STEM award

Katie Larios was honored at an Economic Alliance gathering: “A champion for other young women of color in STEM.”

The Westwood Rainier is one of the seven ships in the Westwood line. The ships serve ports in the Pacific Northwest and Northeast Asia. (Photo provided by Swire Shipping)
Westwood Shipping Lines, an Everett mainstay, has new name

The four green-hulled Westwood vessels will keep their names, but the ships will display the Swire Shipping flag.

A Keyport ship docked at Lake Union in Seattle in June 2018. The ship spends most of the year in Alaska harvesting Golden King crab in the Bering Sea. During the summer it ties up for maintenance and repairs at Lake Union. (Keyport LLC)
In crabbers’ turbulent moment, Edmonds seafood processor ‘saved our season’

When a processing plant in Alaska closed, Edmonds-based business Keyport stepped up to solve a “no-win situation.”

Angela Harris, Executive Director of the Port of Edmonds, stands at the port’s marina on Wednesday, Jan. 24, 2024, in Edmonds, Washington. (Ryan Berry / The Herald)
Leadership, love for the Port of Edmonds got exec the job

Shoring up an aging seawall is the first order of business for Angela Harris, the first woman to lead the Edmonds port.

The Cascade Warbirds fly over Naval Station Everett. (Sue Misao / The Herald file)
Bothell High School senior awarded $2,500 to keep on flying

Cascade Warbirds scholarship helps students 16-21 continue flight training and earn a private pilot’s certificate.

Rachel Gardner, the owner of Musicology Co., a new music boutique record store on Thursday, Jan. 18, 2024 in Edmonds, Washington. Musicology Co. will open in February, selling used and new vinyl, CDs and other music-related merchandise. (Olivia Vanni / The Herald)
New Edmonds record shop intends to be a ‘destination for every musician’

Rachel Gardner opened Musicology Co. this month, filling a record store gap in Edmonds.

MyMyToyStore.com owner Tom Harrison at his brick and mortar storefront on Tuesday, Sept. 6, 2022 in Everett, Washington. (Olivia Vanni / The Herald)
Burst pipe permanently closes downtown Everett toy store

After a pipe flooded the store, MyMyToystore in downtown Everett closed. Owner Tom Harrison is already on to his next venture.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.