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

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.
Written by Matthew Miller, Contributing Writer

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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