Setting a minimum spend for free delivery is one of the few retail mechanisms that reliably changes customer behaviour. What it changes is basket composition, and that determines whether it pays.
The threshold converts a cost into a target
Delivery is an unavoidable cost that customers dislike paying separately, since it feels like a charge for something that adds nothing to the product.
Presenting it as avoidable above a certain amount reframes the decision from a charge to be resented into a goal to be reached.
Customers below the line then look for something to add, which is the behaviour the threshold exists to produce.
What gets added determines whether it works
The mechanism pays where the added item carries enough margin to cover the delivery cost being absorbed.
Where customers reach the threshold with a low-margin item, the retailer has increased revenue and reduced profit on the order.
This is why the placement of the threshold matters more than its existence, and why it is usually set with reference to typical basket values rather than to shipping cost alone.
Setting it too high abandons the order
A threshold far above what customers normally spend produces no additions and instead makes the delivery charge feel large and unavoidable.
The effect is worst where the gap is announced late in the process, after the customer has already committed mentally to the purchase.
Unexpected costs appearing at checkout are among the most common reasons carts are abandoned, and a badly placed threshold creates one.
Free shipping is not free to the retailer
The delivery cost still exists and is either absorbed from margin or built into product prices, and both choices have consequences.
Building it into prices makes individual items look expensive against competitors who charge separately, which affects comparison shopping.
Absorbing it protects the price comparison and transfers the cost to the retailer's margin, which works only where average order values are high enough to support it.
Distance and weight break the average
A single threshold assumes a typical delivery cost, but that cost varies with weight, size and distance, sometimes considerably.
Heavy or bulky items shipped to distant addresses can consume the entire margin on an order that met the threshold comfortably.
Retailers with wide product ranges therefore tend to exclude certain categories or regions from the offer, which reintroduces complexity but keeps the mechanism affordable.