Round Up Live Rates to .99

You've probably considered the psychology of pricing in your eCommerce shop, but you may not have thought about the psychology of your shipping pricing.

For example, how your shipping rates impact your conversion rate.

We think about this every day at PDQ, and get validated all the time, seeing how even little changes moves the needle.

For example, the difference between charging $3.73 and $3.99 for shipping may be just 26 cents, but it just might cost you a sale.

A bit about live rates

Many shops use live rates- meaning their checkout's shipping rates are pulled from the carriers and delivery services they use to deliver orders.

It's easy to spot live rates because they usually seem a bit chaotic, like $3.73.

Since the shipping rates are pulled from the carriers, they're dynamic, so if you return to the same checkout later, you'll likely see another shipping rate, even for the same exact order and shipping location.

This makes some shoppers uneasy..."am I overpaying for shipping if I order right now?". Or maybe the random numbers might just look less attractive for whatever reason (and probably why everything ends in .99 nowadays).

Testing live rates but rounded up to .99

In line with this thinking, we recently tested the impact of rounding up live rates to the nearest .99 for brand with live rates.

And it improved the conversion rate for one brand by 3.68%. (!)

For this one brand it meant an extra 55 orders a month, or an extra $87K a year. (!)

That's just from presenting live rates as they did before PDQ, but rounding up to $.99. And by rounding up they also added another 5c on average per order from shipping revenue.

That's a win/win.

Moral of the story? Round up your live rates!