I am facing that dilemma also... I only charge for the actual package and shipping itself... leave alone gas for the trips, or anything else... but at the same time I want to be fair with the costumers... so I am ok with absorbing that... but to offer free shipping, I get your point, and honestly don't know... I think you should have a minimum shopping ammount for that... and I guess people realizes they usually have to pay for the shipping... Just make sure to clarify it...
Now I don't know if my post has any sense, LOL, had a bad night sleep...