When did the practice of seperating the cost of Shipping and Handling from a product’s advertized price become common practice? Is it a bad sign when you can double your order if you just pay additional Shipping and Handling? Why are the rates so different from one company to another regardless of size or weight?
Have they just done this? It always seemed to me they did this. It’s like tax. On my first job working with the public, my second day I quoted a customer the full price and my manager was like “Mark NEVER do that, it makes it sound so much more.”
I do agree more and more companies are inflating shipping and handling costs. The reason is simple, this way they can offer you a money back guarantee. Of course this “money back” refers to the cost of the item not the shipping or handling.
And let’s not forget the “re-stocking fee,” of some stores but I can see that as some people were abusing the store such as buying a big screen TV for the Superbowl then returning it.
i believe it’s separated out because a merchant probably doesn’t want to run the risk of being accused of fraud when he says “shipping will be 9.99” and your product comes in a size ten envelope with one first-class stamp affixed
make it shipping and handling, and you can charge all you want for that licking, sealing, and walking it to the mailbox.
I don’t believe the OP meant seperate shipping and seperate handling.
Pricing S&H separately from the product price was standard mail-order catalog technique for Sears, Roebuck from before 1900. Pretty much everybody else on Earth learned from them.
Having an ever-increasing “handling” charge above the true shipping cost is a post 1960’s thing, at least in the US. It certainly isn’t new, though it may be getting worse.
Also, sales tax isn’t applied to shipping and handling charges, so the routine is to total the amount of the purchase, figure and add the sales tax, and then add S&H to the total of that amount.
S & H, as used commonly today, is just a way of increasing revenue without making it look like prices are being raised on the product purchased. It’s a profit line item. No different than airlines charging for baggage.
Because S&H charges will vary according to the customer’s location and, sometimes, accordign to whether the item purchased forms part of a larger order and, sometimes, accordign to the deliver option chosen. In other words, there isn’t a one-size-fits-all price for each item whcih is inclusive of shipping and handling.
Remember that the post office originally didn’t handle parcel post for years. When mail order catalogs were first produced. Shipping was the shipping charge of the shipper. This was usually by train. Handling was the cost of having a delivery person take the stuff to the station or deliver it on the other end.
Later on, many companies used shipping and handling as a way of disguising cost, but the FTC started cracking down on the practice in the 1960s and 1970s. Shipping had to actually reflect the true cost of the shipping.
Handling was a bit different. The FTC originally said that strictly mail order companies couldn’t charge handling because they had no extra cost associated with mail order sales. (Unlike a store where they had to box up the item, and have an employee spend time wrapping it up and preparing the product for shipping). However, if the mail order firm had an outside firm handle their shipping, the company could charge the reasonable and customary rate for handling which lead to a lot of mail order firms making their warehouses separate businesses.
Truthfully, I haven’t seen handling charges for quite a while, but I still see shipping charges.
I used to work for one of the major “home shopping on TV” companies (in IT, and not involved in any personal way with customer charges). At one point the VP of (whatever includes S&H) was giving one of the monthly “here’s what we do” talks to the IT group and he mentioned that 1) the company very deliberately set S&H charges so as to break even with its S&H costs and 2) by far the most common customer complaint was the high S&H charges.
And yes, I believe S&H costs are typically (with a good company, at any rate) set so as to make the company indifferent as to whether you return the product for a refund.
(“home shopping on TV” companies receive primarily impulse purchases and expect a high level of product returns.)
This is NOT correct for most (if not all) states.
The rule in both Washington and California is that the charge is exempt from sales tax if it reflects the actual shipping charge only. That is, if the post office charges you $4.72 and you charge the customer $4.72, there’s no sales tax due on the shipping.
However, if there’s any amount not covered by actual shipping costs, you must charge sales tax. So if you charge $10 to ship any order, or if you add $2 to the cost of postage for handling, both of those are subject to sales tax.
Some companies are simply out of compliance with the law and they get away with it until a sales tax auditor shows up at the doorstep. Other companies comply with the law by stating (in the fine print) something like “S&H includes any applicable sales tax.” Wording like that means your $7.95 S&H charge is internally broken down into $4.72 of non-taxable postage, $2.95 of taxable handling and $0.28 of sales tax. They just don’t have to break that out for you on the receipt.
This is especially convenient because shipments made to out of state addresses don’t usually have sales tax due anyway. They’re only losing the $0.28 per order on in-state shipments.
FTR, that’s not universal.
On my Ebay sales that get shipped in-state, I do very much have to charge sales tax, on S&H.
Obviously I stand corrected. 
Thanks for the update, guys. I’m glad to find this out as I’m about to experiment with selling some things by mail myself.
ETA: I’m curious also, dracoi, if it’s legal to ask for just one simple amount that includes S&H and tax if you include fine print saying that S&H and tax have been included in that price? I’ve been told in the past that that was illegal; that one had to list the tax separately.
For a while LL Bean catalog prices included shipping but they don’t now.
Thanks. Guess I’ll call the tax commission. Probably varies from state to state anyway.
I would check with your state. In Washington, a written disclaimer about tax being included is a valid option. Listing the tax separately would also be a valid option. Failing to do either would mean the state assuming the worst and applying tax on top of the S&H. So a $7.95 S&H would be assessed as a failure to pay the state $0.76 in sales tax rather than the $0.28 in my example.
Thanks for your answer, dracoi. Don’t know why it hasn’t occurred to me to just check with the tax commission in the state where I live. Guess I just never have been arsed enough before. 
I worked for a company that would charge $25 shipping and handling, and the sales tax was added on top of that. So, if the customer was in our state (California) we’d tell them S&H is $25, then charge $27.06. Pretty much everyone who was charged that extra tax complained about it.
Some customers also tried to get around the S&H by arranging the shipment to be charged on their account with the shipper, so they’d pay the carrier instead of us. Those customers were still charged $15 handling.