3 Ways to Reduce Shipping Costs

Store discounts of up to 60% off, layaway payment plans and other incentives can result in some pretty significant deals this holiday season. But if you choose to mail that "half-off" sweater to your aunt in California, those savings could very well fly out the window.

Since fuel prices began to climb several years ago, major delivery companies, including United Parcel Service (UPS), FedEx (FDX) and DHL, have implemented fuel surcharges that make shipping packages a pricey proposition.

UPS and FedEx, for example, currently charge an 8.25% fuel surcharge for ground delivery. Ship via express service with one of these carriers and the fuel fee climbs to 28.5%. DHL's fuel surcharges are even more expensive. The shipping company currently tacks on 8.3% for ground service and an eye-popping 30.5% for express. (DHL recently announced that it will end domestic-only services in the U.S. on January 30.) The worst part is: Those are just the fuel surcharges. Other fees abound as well. Deliver to a residence instead of a business using any major delivery service and pay a $1.50 to $2.50 fee per package, in most instances. Ask for an item to be delivered on a Saturday and it will cost $10 to $25 extra, says Jacob Lakhany, CEO of Shipping Sidekick, which compares prices between the major carriers.

"Shipping a package becomes more expensive each year," says Lakhany. "And that will continue should gas prices rise."

To help lessen the blow of higher shipping costs this holiday season, here are some tips on how to send those present-filled boxes without going broke.

In late September, Consumer Reports shipped a five-pound package from Yonkers, N.Y., to Folsom, Calif., using the U.S. Postal Service, FedEx and UPS to determine which one charged the least after all of the fees and other charges were added in. The winner: the U.S. Postal Service.

For the average consumer, comparing each of the major shipping companies' prices is time-consuming -- and tedious. To help streamline the process, use sites like ShippingSidekick.com, which hunts down real-time prices from all of the major shipping companies based on information such as the package's departure location, its destination and its weight.

Spend a few minutes online and you can get serious savings on shipping. Both FedEx and the U.S. Postal Services offer free online discount programs with discounts that can really add up.

FedEx customers can save 15% by signing up for a FedEx Express account at FedEx.com and using FedEx Ship Manager to prepare their package (by printing out the appropriate labels on their home computer), says Carla Boyd, a FedEx spokeswoman.

The U.S. Postal Service's free Click-N-Ship program offers discounts of 3% to 11% per package (again, if the user prints their own labels and postage from their computer), according to Gerald McKiernan, a spokesman for the Postal Service. Once a package is ready to be sent, customers can go online and schedule a free carrier pickup.

Avoid paying for expensive express delivery by getting your packages out the door as early as possible, especially during the holidays.

"What might normally get to its destination on time with ground or regular shipping might not as we get close to the holidays," says Lakhany. Not only will sending a package earlier ensure that it will arrive on time, it will also save you about 50% off the expedited shipping rate, he says.

Here's a breakdown of the last day the U.S. Postal Service, UPS and FedEx say they can receive a package and guarantee its delivery before Dec. 25.

To lure in reluctant shoppers, online retailers are offering a slew of shipping incentives this holiday season.

"The No. 1 reason people abandon their shopping online is high shipping fees," says Luke Knowles, founder of FreeShipping.org, which offers free shipping coupons to more than 800 stores. In fact, some 75% of shoppers surveyed said they're more likely to shop online if the retailer offers free shipping, according to market research firm Forrester Research.

Here are some of the shipping deals consumers should expect to find while shopping online.

Free Shipping with Minimum Order: Spend $25 or more at Amazon.com (AMZN) and the shipping is on them. At Fossil, you need to spend $100 or more for free shipping while at J.C. Penney (JCP) purchases of $99 or more through Dec. 1 will be shipped for free with coupon code JCPCTRKY.

Flat-rate shipping: Some stores like Gap (GPS), Old Navy and Banana Republic (all owned by the same company) offer one set shipping fee of $7 -- no matter how large the order is. Bluefly.com, the online luxury retailer, is doing the same with a flat shipping fee of $7.95.

Site-to-Store Shipping: Can't find what you want at the retailer's store, but you can find it online? See if they offer site-to-store shipping that allows you to make a purchase online then pick it up for free at the retailer's store. Participating stores include Wal-Mart (WMT) and outdoor gear retailer REI.