Free shipping is enticing, says Ravi Dhar, the director of Yale’s Center for Customer Insights, because shoppers irrationally hate to pay for certain services—even those that they value immensely, such as speedy and reliable delivery. This demonstrates the economic principle known as “pain of paying,” a psychological discomfort that keeps people from completing purchases. Certain factors seem to sharpen the pain. Using cash rather than credit cards typically hurts more, because paper money must be physically relinquished. Higher charges for convenience, such as the jacked-up price for a soda in a hotel minibar or closer parking at a sporting event, usually rankle too. Printer ink and hotel Wi-Fi torment because they’re a means to an end that consumers feel they’ve already paid to reach. You bought the printer—of course you need to print things. You booked the hotel—of course you need to check your email during your stay. (Hotels, with their inherently captive audiences, are veritable houses of pain.) Paying for shipping is a two-for-one pain deal: Not only are you confronted with the actual cost of your convenience, but you’re being asked to pay “extra” for a store to fork over items you’re already laying out for.

“The reaction to free shipping goes beyond the normal way of looking at cost and benefit,” Dhar explains. “A 20 percent discount, which would add up to the same $5 or $8 that shipping costs—that’s not as effective as giving free shipping.” In general, Dhar says, shoppers are even willing to pay more overall for the same goods if there isn’t a separate shipping charge. What bothers them most is the nickeled-and-dimed feeling, not the total amount of the tab.

It wasn’t always like this in America, and it’s not like this in most other countries—standard European shipping and return policies would probably seem downright hostile here. That’s because U.S. shoppers are used to being coaxed into purchases by retailers who can and will bend over backwards to land a sale—another extreme of capitalism, American-style.

The main reason small businesses can’t keep up with the behemoths is economies of scale. Thanks to their huge infrastructure, mega-retailers simply pay less per package for shipping. Scale also helps when it comes to an ever more popular companion to free shipping: free returns. They’re another salve for the pain of paying, but processing returns requires manpower and eats into profits. Big clothing retailers can recoup some of the costs by off-loading returns and stale inventory to discount stores such as Marshalls, but small businesses don’t have that option.

Dhar and Berman point to the dot-com boom as the moment when retailers, fed by investor dollars and under no pressure to turn a profit, started offering free shipping to get people to take a chance on companies they’d never heard of. Webvan—an early and ill-fated grocery service—and Zappos, the online shoe store, helped normalize the incentive. Venture capital still drives much of the free-shipping expectation, for the same reason it did in the beginning: Getting people to try something new can be difficult, and taking a loss up front is often necessary to sweeten the deal enough to make it happen.