December 17, 2020

Handling Fee

This goes back more than twenty years.

I'm running the Circulation Department at Eddie Bauer. Profit was scant. Merchandise productivity was awful. Our SVP of Marketing wanted to do something brazen.

  • He wanted to add a $3 handling fee to every order.
And that's exactly what he did.

CUSTOMERS HOWLED. The customer contact center grumbled, and for good reason ... they were being howled at daily by customers.

Funny side note:

  • Repurchase Rates remained constant.
  • Orders per Buyer remained constant.
  • Items per Order remained constant.
  • Price per Item Purchased remained constant.
  • Profit dramatically increased.
In other words, customers HATED the $3 fee. Customers grumbled about the $3 fee. Then customers bought merchandise and paid the $3 fee.

Think about this as UPS and FedEx pass costs along to you. You are howling about it. You are grumbling about it. And then you are paying them additional $$$ anyway.

Might your customers be willing to spend more if you asked them to?

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