Why charge more to buy outright than when setting up a new account?

  • 1
  • Question
  • Updated 4 years ago
  • Answered
I am already a koodo customer, I called and asked the retail price of samsung note 2, was told 400 dollars. My husband went to pick it up for me and was told 550 because it is not going on a new account. I can see selling it cheaper if you have a tab, but this makes no sense, I don't want a tab and I don't want a new account just want to buy the phone outright and not be ripped off simply because I am already a customer. Just seems like a good way to drive existing customers somewhere else.
Photo of Amanda

Amanda

  • 102 Points 100 badge 2x thumb
  • frustrated

Posted 4 years ago

  • 1
Photo of Jonathan I

Jonathan I, Mobile Master

  • 114,364 Points 100k badge 2x thumb
You can buy it outright if you're already on postpaid! You will have to pay out any negative Tab balance (unless a Koodo shop has the power to override this in the activation channel). The rep just selects the "No Tab" option.
Photo of Chris Petersens

Chris Petersens

  • 47,266 Points 20k badge 2x thumb
They are not selling it cheaper!:-) it's the same price outright whether you are a new or existing customer. As a matter of fact, I know existing customers sometimes receive email from koodo to get a particular phone at a lower price through trading in your old phone.

The tab doesn't make any phone cheaper it just helps lessen your out if pocket cost. It's an interest free loan essentially, but you do have to pay it back.
Photo of Amanda

Amanda

  • 102 Points 100 badge 2x thumb
I am prepaid, seems koodo does not care about prepaid customers.
Photo of Jonathan I

Jonathan I, Mobile Master

  • 114,364 Points 100k badge 2x thumb
Ohh well that's different. You only get the postpaid price if you're going on Tab plans (but No Tab is still an option). Sorry about that.
Photo of Dennis

Dennis, Mobile Master

  • 187,758 Points 100k badge 2x thumb
Are on a monthly plan or prepaid?

If on a monthly plan, Koodo should sell you the phone outright for $400 (note that because it is not a new activation on the tab the $100 bonus gift is not applicable)

If on prepaid, then the phone is $550 and it should come with a sim card with a $20 prepaid credit.
Photo of Amanda

Amanda

  • 102 Points 100 badge 2x thumb
I am on a prepaid plan, but it just does not seem like good business to charge me more just because of that. A paying customer is a paying customer regardless, a postpaid person without a contract is no more likely to stay than I am.

It just seems like bad business to charge more to prepaid customers, I don't see how this benefits koodo.

Also frustrating is that they could not tell me when I phoned that it would cost 550 even though I asked what the cost is to buy just the phone with no plan. They told me 400, so my husband wasted time and fuel driving all the way to the store only to be told that it would cost more and end up with no phone because of that.
Photo of Dennis

Dennis, Mobile Master

  • 187,758 Points 100k badge 2x thumb
Apparently monthly customers tend to stay longer and pay more than prepaid customers to their phones are subsidized more.

I understand that it's unfair but monthly customers seem to be their primary business and who they are mainly trying to attract. A very large part of the Canadian market is monthly vs prepaid.

Yes they should have asked if you were a prepaid customer first.
To be fair since there are many more monthly customer the Koodo employee seemed to have just made an assumption. An innocent assumption that Jonathan seemed to have made above as well.

My loophole would be to activate a new account on tab to get the $150 retail price discount, plus keep that line for 6-8weeks to get the $100 bonus gift. That is about 2-3 months worth of service before cancelling. If you are on the $30/month (lowest cost plan for monthly) you would end up ahead and maybe even a little more ahead than if you were to just buy the phone for $400 without the bonus gift
Photo of Some random Mobile Master

Some random Mobile Master, Mobile Master

  • 39,554 Points 20k badge 2x thumb
Although I fully agree with you Amanda that the phone should be priced the same, there is a reason why it's not.

It's simply to avoid people buying these outright and then immediately move it to a different carrier that sells the same device for more money. Simple as that. As for prepaid (I'm on it too myself), we never carry any debt towards Koodo as everything is paid before use, As such, users like us are (in THEIR opinion) much more likely to jump on good offers from the competition since we never get one last huge bill.

Something similar happened in 2012 when the Galaxy S2X was released. It quickly became well known that the S2X was AWS-compatible, and it being priced at $300, countless people flocked in to buy the device outright only to unlock them and use them on Wind or Mobilicity. Koodo learned a thing a two from this... and I can't blame them.

So, there you have it, that is why you (we) pay more for our phones.
Photo of Amanda

Amanda

  • 102 Points 100 badge 2x thumb
As I have now been shopping around other companies prepaid plans, I don't think many companies can compete with koodos prepaid prices/plans, so to me I would think people would stay because of that on it's own. I actually feel stuck since I bought data and voice boosters on their doubling sale and will now have enough minutes and data for well into 2015, so it is almost like a contract.

I had thought of activating a new account to get the lower price and just cancelling the plan after, I really don't care about the 100 dollar bonus at all, but was told I do not qualify for a postpaid account due to my credit, so that is not an option for me.
Photo of Moonmack

Moonmack

  • 4,000 Points 4k badge 2x thumb
We're postpaid but I do find it annoying to have different prices for prepaid customers. I'm assuming Koodo is not selling the phones at a loss for postpaid customers, but I don't know.

@Dennis, that seems like a good idea as long as the credit check is not a problem for activating a new account.
Photo of Morgan Craigon

Morgan Craigon

  • 248 Points 100 badge 2x thumb
If you get it on a tab they deduct a certain amount off the phone because you will be paying for that balance (just say $150) while you are paying for your plan. That's why the plans are so much more expensive. When you buy the phone outright you do not pay the extra per month.
Photo of Sophia

Sophia, Mobile Master

  • 141,558 Points 100k badge 2x thumb
The most ridiculous of all is selling the Nexus 5 on prepaid for $550 :D The person who buys that needs their head examined, haha!
Photo of Some random Mobile Master

Some random Mobile Master, Mobile Master

  • 39,554 Points 20k badge 2x thumb
True that, lol!
Photo of Morgan Craigon

Morgan Craigon

  • 248 Points 100 badge 2x thumb
If you get it on a tab they deduct a certain amount off the phone because you will be paying for that balance (just say $150) while you are paying for your plan. That's why the plans are so much more expensive. When you buy the phone outright you do not pay the extra per month.

This conversation is no longer open for comments or replies.