Wal-Mart takes on Amazon Prime with new ‘ShippingPass’

Wal-Mart is taking aim at Amazon’s loyal following with a pilot service called ShippingPass that promises the coveted service of fast, free shipping.

One of consumers’ biggest complaints about shopping online is having to pay for shipping. In fact, 77% say that free shipping remains the most important option during checkout, and 60% have added items to their cart to qualify for free shipping, according to a 2015 study by ComScore and UPS.

And stores are taking notice. Expensive shipping may become a thing of the past, thanks to subscription services like Amazon Prime, where members pay an annual fee to secure free shipping on nearly every purchase they make throughout the calendar year.

Now, Wal-Mart is taking aim at Amazon’s loyal following with a pilot service called ShippingPass that promises the coveted service of fast, free shipping.

Is Wal-Mart’s ShippingPass worth your cash? We compared the subscription to Amazon Prime to help you decide.

What is ShippingPass?

The premise of Wal-Mart’s new ShippingPass pilot program is simple: customers sign up to receive unlimited two-day shipping for $49 per year.

There’s no minimum order amount. Select items that are not eligible for two-day shipping still go to subscribers for free and will arrive in roughly four to six days.

“We launched the ShippingPass beta last year based on research that customers want a low-priced, unlimited free shipping program that is reliable and predictable,” Wal-Mart spokeswoman Jaeme Laczkowski says. “Customers in our test have loved ShippingPass. They shop on Walmart.com more often to take advantage of our low prices, and now we can give them even faster, flexible shipping at a great value.”

Shoppers interested in the program can visit the ShippingPass page on Wal-Mart’s website to input their email address and ZIP code. They’ll join a waitlist and be notified when it’s available to them. The company has not given a timeline for a full rollout of the service.

How does it compare to Amazon Prime?

Wal-Mart’s biggest competitor in the shipping subscription space is Amazon Prime. Already well-established, Prime is considerably more expensive than ShippingPass, at $99 per year.

Prime offers members multiple shipping options, including: free two-day shipping nationwide on more than 30 million items, free same-day delivery by 9 p.m. on over 1 million items in select metro areas, and free two-hour delivery on some products in select metro areas via the Amazon Prime Now app. (Note that you’ll need to order at least $35 worth of eligible items to get free same-day shipping.)

In contrast, more than 1 million items at Walmart.com are ShippingPass eligible. For returns and exchanges, customers may ship items back for free or take them to a local Wal-Mart store.

Prime offers more than fast shipping, however. Members can also receive access to unlimited movie streaming, unlimited photo storage, unlimited Prime Music streaming and 30-minute early access to time-sensitive sales, called Lightning Deals, among other benefits.

Things to watch out for

Before signing up for either Amazon Prime or Wal-Mart ShippingPass, keep in mind that:

• Not all items are eligible. Not every purchase you make will qualify for the free, fast shipping. Consider the types of items you regularly buy.
• Your subscription will automatically renew. If you take no action, each of these subscriptions will automatically renew after one year. You’ll need to be proactive and sign in to your account to opt out of the renewal if you wish to cancel.
• You should know if you’d get your money’s worth. Determine the value of each of these subscriptions in your life. Consider how many purchases you’ll make in one year. Would you accumulate enough in shipping costs on them to more than offset the membership fee?

What it means for you

For loyal Wal-Mart shoppers, ShippingPass is a no-brainer, especially if you regularly shop online from the discount superstore. A few virtual shopping trips can easily rack up $49 in shipping costs.

But for a more comprehensive online shopping experience — including options for free same-day and two-hour delivery in some metro areas — Amazon Prime is the clear choice, especially if you’ll also use features like its streaming music and movies.

Courtney Jespersen is a staff writer at NerdWallet, a personal finance website. Email:courtney@nerdwallet.com. Twitter: @courtneynerd. This article first appeared at NerdWallet.