Why is it that a company which sells an item only by mail order tacks on a "postage and handling’ charge which is frequently a significant fraction of the price. I mean, its not like I can decide to go into their store and buy it to avoid the charge. Why shouldn’t this cost be factored into the price in the first place.
The philosophers have only interpreted the world in various ways; the point, however, is to change it. (Karl Marx, 1845)
Legal purposes. Mail order is subject to postal regulations. Also, most catalogs base S&H rates on volume rather than the actual weight of the merchandise. Here’s what I found from some of the catalogs I have laying around:
Assuming the total order price is $140 and I’m not asking for special shipping
Victorian Trading Co = $9.90
Boston MFA = $10.95
Coldwater Creek = $10.95
Herrington = $13.95
Levenger = $13.95
Signals = $13.95
HoldEverything = $16.50
I used to be in customer service for a large catalog company that based S&H on weight - the heavier the item the more S&H, which seems to make sense to me but never made sense to any of the people on the other end of the line. Basing S&H on weight means that it would also be priced per item, making for a more complicated and more expensive pricing system.
IMO, it’s a surcharge to make a little more profit. “Oh, but we have to pay the people who pack and ship the item!” Pfui. Overhead is paid by the markup on the merchandise. The company publishes a lower price for an item and make then makes it up with S&H.
“I must leave this planet, if only for an hour.” – Antoine de St. Exupéry
Are you a turtle?
Johnny L.A. is absolutely correct.
S&H charges do not reflect the actual cost the company pays to deliver. It is just another way to profit.
I ordered CD’s from BMG on their “Buy 1 get 10 free” deal. I knew they would charge me $2+ S&H for each CD, even though they ship all CD’s bulked together. It averaged out to about $4+ for each CD, which is a good deal, since I would have eventually bought all those CDs one way or another.
Now I just have to beware of them automatically sending me CDs. If you don’t respond to their mailings checking the “I don’t want anything at this time” box, they will just send you something automatically. I don’t know how long this will go on. I’ll have to look it up. I still think it’s a pretty good deal.
There’s always another beer.
I used to work for a company that did mail-order business. On overseas shipping or on very large orders, we charged actual freight costs (i.e., whatever the trucking company charged us) plus a small fee for the time & materials to box everything up. That was because the freight charges were so extremely high (e.g., hundreds of $$; our stuff was HEAVY) that we didn’t want to be accused of gouging - generally the customer received a copy of the actual charge from the shipping company. On small domestic orders, we charged a S&H fee that was (IIRC) a fee based on the volume of the order.
This was a small local company that happened to do some mailorder - we did NOT do a majority of business that way and our prices did NOT include any 'overhead’to pay for S&H - to charge extra for that on ALL items would have ripped off our local customers. Packing and shipping can be quite expensive even on small or lightweight orders - freight companies have minimums too. The company could not afford to just eat those costs.
We charged a S&H fee rather than exact costs because it was MUCH easier and less time-consuming than trying to figure up the exact shipping, labor time, materials costs, etc., for each order - doing all that would have increased the S&H fee :). But I think you’d be surprised at how high the costs are if you sat down & tried to figure it up.
Since companies with ONLY mailorder business
are fairly infrequent and relatively new, my guess is that most companies work pretty much the same way we did - charge the same prices for local & mail business, then add fees to cover S&H. It’s much easier than trying to keep track of two price lists.
Question - how sure are you that this company has NO walk in store operation ANYWHERE whatsoever? Did it start out as mailorder only, or did it start as a local business & change to meet demand? (Because then you’ve got the status quo effect, “but we’ve always done it this way”.)
Of course, since the S&H fee setup is ‘standard practice’, it’s just as easy for the mailorder only businesses to do it that way as well; after all, customers expect to pay a S&H fee. Don’t want to confuse 'em, eh?!
Not to say that some of those companies don’t gouge ya on the S&H - hell, most of 'em gouge on the prices, IMO. 
The adage “Knowledge is Power” is incorrect. The correct formulation is “Knowledge that other people don’t have is Power”. - The Donald
One important reason for shipping “and handling”:
When you return a mail-order item, you’re entitled to a refund “less shipping and handling.” The company thus makes a tiny profit or, at least, takes a smaller loss for any product returns.
I find it very hard to believe that it costs $7 to ship a box of click-lights; apparently they do the ‘handling’ with ermine mittens or something.
First, as a former vendor of a novelty silk marijuana plant, back about 10 years ago, I can tell you this:
Cost of making said plant (2.5 feet high and about 1 foot across in a wicker pot) = $4.00. Shipping in US = $1.50 (it was pretty light since the base was styrafoam (sp?)
Price charged via mail order through High Times magazine = $19.95 plus $5.00 S/H ($10 S/H if shipped internationally)
Second, the reason shipping and handling isn’t included in the price is because…it raises the price! Odds are that you have some price break point in your mind above which you won’t buy the item. And while at $15.00 (and free shipping) an item is a ‘rip-off’, that same item in another catalog at $10.00 plus $5.00 shipping seems ‘reasonable’.
When I used to live in Austin, TX, I’ll never forget the time we drove to Sea World in San Antonio. They had just ‘lowered ticket prices’ for summer. Yeah, except that parking was raised to $10.00 per vehicle! The best part was that the two lane road to the park was probably 1.5 miles long, and had ‘No parking/ Tow away’ signs on both sides, so you really didn’t have the option of parking anywhere nearby. And in the Texas heat…let me tell you…you didn’t WANT to walk that 1.5 miles!
Note to Beeruser: Columbia House FINALLY changed their pratice of sending you the CD/Record/Tape of the month automatically. Now, if you want, it, you send in the card. Otherwise, you’re clear.
Note to Beeruser:
Typically you have to buy at least 1 CD at regular club price from the monthly selections. As soon as you do that, you can cash in your extra free selections and then cancel membership (like everyone else).
It should be explicitly explained in the materials that you used to sign up.
MaxTorque said:
That’s because the shipping and handling expenses are non-recoverable on their end. If they get back the product still new and unused, they can resell it. But the expenses for postage and paying to stuff in in a box, etc, are money they lose either way.
And if they cannot resell the product, at least they are only out the cost of that actual product, and not the cost of shipping it too.
You also have to include the price of the box; most of the stuff we buy mail-order is electronic, which means fragile and expensive. I don’t mind paying high shipping prices if, once I get my product, I can see it has been lovingly packed in the most advanced, space-age shock-absorbers, static bags, etc. Of course, they could just include the price in the price of the item, but then there would be no way to figure out discounts on multiple items. Another way to look at it is that mail-order places do not include S&H prices in the total price for the exact same reason that traditional merchants do not add sales tax to the sticker price. As long as they can blame someone else for part of the charge they will do it.