Shipping charges and shipping-charge skepticism: Implications for direct marketers' pricing formats

The purpose of this research is to develop a theoretical framework for understanding consumer response to direct marketers' pricing formats based on shoppers'perceptions of fairness. As part of this effort, we introduce an individual difference variable we call shipping-charge skepticism. An experiment is conducted (n = 189) to examine whether offers are more appealing when shipping charges are bundled into a single price or partitioned out separately from a base product price. We demonstrate that when an external reference price is available, shipping-charge skeptics prefer direct marketers' offers more in a bundled price format, whereas non-skeptics prefer them more in an unbundled price format. Implications and areas for future research are discussed.