Treating charged delivery as a pass-through that cancels its own cost hides two numbers at once. Most stores under-recover shipping, some over-recover it on small baskets, and neither fact is visible until the revenue and the cost are on separate lines of the same statement.
It also carries a fee. The gateway charges its percentage on the whole amount it moved, delivery included, so shipping revenue is not free money, and a free delivery offer gives up slightly less than the charge it stops collecting.
The decision it feeds is the threshold: the basket size at which absorbing delivery leaves the store no worse off. That threshold is always above the average order value, because only the margin on the extra basket pays for the shipping given away.
