Shipping, handling are extra online

Shopping: Clicker shock is hitting people who believe that buying on the Internet will save them money.

April 12, 1999|By Bob Tedeschi | Bob Tedeschi,NEW YORK TIMES NEWS SERVICE

Car dealers have a reputation for waiting until the last minute to reveal hidden charges to unwary customers.

The Internet may be developing a similar syndrome -- call it clicker shock -- as retailers acquire a reputation for hiding shipping and handling charges until the final stage of the transaction. Consumers who reach that point face an unsavory choice: swallow higher-than-expected prices, or abandon the purchase, often after investing time filling out a registration form and possibly giving out a credit card number.

E-commerce sites say their motives are not duplicitous, listing technological hurdles and their unwillingness to bog down shoppers by asking too early for the information that determines shipping costs. Even so, many sites lure customers with promises of low prices up front, which are often offset by high back-end charges.

The ability of consumers to easily research prices on line, particularly with the aid of price comparison services, has contributed to the reluctance of merchants to disclose the add-on charges quickly. These services typically list the advertised prices offered by various resellers for a range of items, but leave it to shoppers to find the final selling price -- which can be as high as 40 percent more than the advertised price, once shipping and handling is added.

The price pressure is felt most keenly by sellers of so-called commodity goods, like computers, books, CDs and videos. Resellers all buy such goods for virtually the same prices, so they are often compelled to advertise low prices to consumers and find other ways to make a profit on each sale.

One recent Internet search for a Compaq Presario 1235 notebook computer, for instance, yielded 29 prices ranging from $1,099 to $1,579, before shipping and handling. Among these, the retailer advertising the lowest price, Corporate Raider (, charged the most for shipping -- $48 for UPS ground service. (UPS itself charges roughly $10 to ship such a package coast to coast, via ground service.)

The five Internet retailers in this sampling that advertised the lowest prices for the computer made consumers go no fewer than three steps and as many as seven into the buying process before disclosing shipping and handling fees. According to a study by the Yankee Group, a Boston consulting firm, 66 percent of Internet shoppers see shipping costs as an obstacle to purchasing on the Web.

"I don't think it's necessarily anything subversive on the part of e-commerce sites," said Melissa Bane, a Yankee Group analyst. "It's a function of the E-commerce transaction systems. No one thought this through and said, 'We should put shipping and handling up front,' until now."

A contributing factor is that many Internet retailers have more than one warehouse, so they must know the consumer's location before they can calculate shipping costs. These retailers do not want to alienate potential customers by making them divulge personal information before they shop, so they wait until late in the process to gather facts like the shipping address.

Even if sites have difficulty calculating shipping costs, what stops them from giving a range of shipping and handling fees up front? "It's not necessarily a hard thing to do," said Peter Granoff, co-founder of Virtual Vineyards, a Web wine seller ( "It's just competing with a million other priorities." Granoff said that in response to customer comments, he was changing his site, in part, "to put more shipping information up front."

For now, of the 10 most visited shopping sites, as measured by Media Metrix, an Internet research firm, just one,, includes a "shipping policies" link on its first page. The link leads consumers to a chart explaining shipping and handling fees. First-time buyers who miss the shipping policies link on Amazon, though, must wait until the final stage of a seven-step registration and purchasing process to find out shipping costs.

The other sites in the top 10 that arrange for shipping do post information about the shipping and handling fees, but these explanations are often buried within "help" or "shopper information" pages.

For sites that do provide a range of shipping and handling costs alongside the price, like NECX Direct, a computer goods retailer (, the decision to do so is not easy. "Sometimes we kick ourselves and say, 'Why don't we play that game, too?'" said Brian Marley, vice president for operations at NECX Direct. "Not that we're martyrs or anything, but we just don't see the integrity in that."

In determining how much to charge for shipping, many Internet retailers have adopted the practices of mail-order companies, said Cliff Sharples, founding chairman of, a trade group of Internet retailers. Sharples, who is also chief executive of, which sells gardening supplies, said that "almost all of the mail-order companies look at shipping as a way to break even, or as a profit center."

Sharples, who is planning to redesign to disclose shipping and handling earlier in the purchase process, said sites that withheld shipping and handling information and then charged high fees risked undermining the industry's growth. "It's a very fragile environment out there," he said. "This issue, and privacy, can have a very large effect on the overall adoption of E-commerce."

Jakob Nielsen, who advises companies on how to make Web sites easier to use, agrees. "There's a danger of the Web turning into a low-trust environment, and this adds to it," Nielsen said. "You feel like you've got to be on guard constantly, because people are trying to cheat you. You might still buy, but it's not a pleasant experience."

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