Two things happen when people learn they can get something for free. Firstly, they forego the mental cost-benefit analyses usually associated with making a purchase. Secondly, customers tend to perceive the benefits of a free product as higher than they are. Customers overestimate the positive qualities of a free product, which is true even when the freebie is the shipping.
That is why, if you offer free shipping, you can successfully increase the average basket value and conversion rates.