CHICAGO (AP) – ‘Twas the week before Christmas and despite all the sales, fewer presents were shipping to shoppers by mail.

This year’s dismal holiday shopping season is producing more peril than poetry for merchants hoping to eke out a profit, even for online retailers, who’d grown accustomed to seeing sales grow 25 percent or more each year.

Amid the worst sales atmosphere in decades, more than three-quarters of online merchants will offer free shipping at some point this season, culminating this week with Friday’s deadline for ordering packages delivered by ground mail in time for Christmas, according to data from the National Retail Federation.

Experts say those efforts may be the saving grace for Internet sales, which are backtracking to hold steady at $29.2 billion this season, according to forecasts by comScore Inc. Sales at established brick and mortar stores are expected to be down 1 percent compared with last year, according to the International Council of Shopping Centers.

If that comes true, this would be the weakest season since at least 1969, when the index of same-store sales was started. Same-store sales, considered a key indicator of a retailer’s health, are sales at stores open at least a year.

“The economy is in a very bad way and every sector, every segment, every distribution channel, every everything is taking a hit,” said Donna Hoffman, a marketing professor at the University of California, Riverside, who is co-director for the school’s Sloan Center for Internet Retailing.

“I think the most significant tactic retailers have in their arsenal is free shipping,” she said. “Offer free shipping and it really stimulates sales.”

Liberal offers were commonplace around “Cyber Monday” – the Monday after Thanksgiving and the unofficial kickoff for the busiest season online as well as off. Merchants showcased free shipping, financing options and deals like $10 off purchases of $50 or more, as well as traditional promotions.

When preliminary data showed a stronger-than-expected start to the season, retailers began scaling back their promotions. But then their sales slipped. Now, they’re bombarding last-minute shoppers with markdowns and shipping offers.

Among them:

• Old Navy, the Gap Inc. subsidiary, is offering online shoppers up to 60 percent off;

• Online jeweler is sending “Daily Gem” e-mails to customers during December, alerting them to new specials each day;

• Shoe store, clothing retailer J.Crew and others are blasting e-mails to shoppers about free shipping, including free two-day service at bag retailer Timbuk2;

•, the designer-goods discounter, is cutting its fee for expedited shipping.

Many online retailers also are giving procrastinators extra wiggle room, offering Christmas Eve delivery on purchases made as late at 5 p.m. EST on Dec. 23. For instance, Wal-Mart on Thursday extended its final shipping deadline to Dec. 22 and is offering standard shipping through Dec. 20.

Chicago pharmacist Daniel Abazia didn’t need extra time to order his wife’s Christmas present, a new MacBook computer he bought Thanksgiving weekend from But the 27-year-old did snag free shipping from the nation’s largest consumer electronics chain – an unexpected treat.

“It was nice to know what I wanted and to save the time and frustration of going to the store,” he said.

At online powerhouse, free shipping for customers not enrolled in the retailer’s “prime” program, expired Tuesday, and the cutoff for all standard shipping was Thursday for most shoppers.

Spokeswoman Sally Fouts said the company couldn’t comment on sales traffic or predict how much business would come at the last minute.

“I think consumers feel more and more confident this year that they’ll get their packages on time,” said comScore analyst Andrew Lipsman. “And the promotions give people that security.”

Only subscribers are eligible to post comments. Please subscribe or to participate in the conversation. Here’s why.

Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.