Lately my cell phone service provider has kept calling me, wanting to give me a free phone. It seemed odd, considering I just bought a brand new BlackBerry several months ago. It turned out that I got a too-good-to-be-profitable deal and the service provider wanted to get out of the contract.
I had locked in a sweet deal, and they knew it.
The only way they could get out of the deal was to offer me some short-term incentive and to draw up a new contract. Since I wasn’t prepared to accept their offer of a free phone, there was nothing they could do to get out of the contract.
Turning the tables, if I’d been the one who wanted to cancel the cell phone, I’d have been hit by a cancellation fee of several hundred dollars.
Moral of the story?
Be aware of big companies offering you a new free phone, bundled savings, combo deals, and other incentives on your existing services. Chances are you don’t currently have a fixed-term contract (meaning an obligation to continue buying their services until the end of the term) or that your old one has expired, and they now want to lock you in for another few years. Once you got your new phone, they’d casually say, “we appreciate your loyalty to our company for the next 10 years.”
The world isn’t exactly a fair place, but I do treasure these rare moments watching the big guy trying to buy me out of a deal.
