Restocking and upgrade fees play the role of Scrooge this holiday season

Restocking and upgrade fees play the role of Scrooge this holiday season

Summary: If you are planning to buy someone a smartphone this holiday season, make sure it is the one they want or you will be charged restocking fees. Even if it is a device they want, mandatory upgrade fees apply as well.

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I recently read that smartphones were at the top of the list for many folks this holiday season. One aspect of buying through a US carrier that you need to keep in mind is the Scrooge tactic of charging a mandatory restocking fee for any return or exchange of an opened new phone. In the past, there were warnings that a restocking fee may possibly apply and it was largely dependent on whether or not a person was abusing the system or not (buying and swapping regularly), but lately these fees have turned mandatory. I know with T-Mobile a bright yellow sticker is attached to the box and they make it clear that once you leave the phone is yours unless you want to pay $50.

T-Mobile has some of the lowest early termination fees ($200), but the highest restocking fee of $50. Verizon charges $35, AT&T $35, and Sprint $35. If you return the device unopened, then you may qualify for a fee waiver. Some of the smaller regional carriers do not charge restocking fees and are generally more customer friendly. Tablets may even carry higher restocking fees (up to 10% of the purchase price, $75, and other amounts) so make sure you are buying something that won't be returned.

I understand that the device is no longer new when you return it within the "trial" period and thus the carrier shouldn't be selling it as new so there appears to be some risk to the carrier. They can use these devices as replacements though since they send out refurbs when your device breaks or has problems and returns seems to be a good way to build that replacement stock. Also, the carriers are making serious cash over the two year life of your contract and they should assume some costs to make sure you have a device that you will be happy with over the life of the contract. I am blessed to be able to try out lots of phones before I commit to buying one for myself, but consumers do not have that opportunity and for many of these phones you really do need to try then out to make an informed purchase decision.

Another fee to keep in mind is the stupid "upgrade" fee, usually $18, for the "privilege" of upgrading your phone. This fee makes absolutely no sense to me and is just another way for carriers to stick it to the customer. You would think they would want to encourage people to upgrade, extend contracts, use more subscription services, etc. rather than discourage them with additional unjustified fees.

I am not planning to buy any smartphones this holiday season since my family is covered and I am well stocked with the Note II, iPhone 5, and HTC 8X on my three carriers. Are you looking to purchase any new smartphones for the holiday season?

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Topics: Mobility, Smartphones, AT&T, Verizon

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5 comments
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  • No smartphones...

    Just 3 iPad minis and 2 Kindles.
    DontUseMicrosoftAtAll
  • This is fallout from the early 1990s.

    If memory serves me correctly, and admittedly it's been a long time, retailers were selling returned PCs as new. Someone brought a lawsuit which I believe was successful. Since they can't sell it new they have to discount it. Thus the restocking fee.
    ye
    • Restocking fees where originally there to keep borrowers out of the stores

      In the late 90'searly 00's, when VHS and Betamax Video Cameras where running $1200 (or whatever) It wasn't uncommon for someone to buy one before vacation, use it, then return it to the store within the 30 return policy, get a full refund back. Same went with digital camera when they first came out.

      The stores ere basiclly just "lending" high ticket items out to people. Imagine doing that with a restocking fee, where you didn't get $180 - $250 back?

      It stopped that practice from happening alot of places
      William Farrel
  • Restocking and upgrade fees play the role of Scrooge this holiday season

    Ran into this issue last week. An upgrade fee to upgrade a phone which means absolutely nothing but gives Verizon another $30. I was about to ask the sales rep if they wanted to screw me over any other way they could. I wonder if filing a complaint with the FCC would do any good.
    Loverock-Davidson
  • Consider Buying Outright

    After reading the contract, I bought my iPhone and have been quite satisfied with that choice. I think it's worth considering. Too many folks don't seem to fancy honoring the contract they sign (but never read). If you are a student stretching your dollars, that contract can really be a nightmare down the road! Try to get mom and pop to buy your phone of choice, then you can float free. Plus, you can sell it and recoup some of your dough when you want a better phone, n'est-ce pas? Happy Ho Ho!
    sechoinard