How Verizon and AT&T Stopped Me from Buying a New Phone

I’m interrupting our usual discussions on mostly macro issues to tell a very personal and extremely frustrating micro story about how I ended up not buying something I had planned to buy.

First, you need to know that one of my basic rules in life is that, while I’m more than willing to work hard to earn my money, I don’t think I should have to work hard to spend it.

Second, you also need to know that my existing contract with Verizon Wireless, a company with which I long have had a love/hate relationship, expired about 10 days ago. I am now free to switch companies without paying a penalty, to get a new phone, and to get a $50 discount from Verizon off a new phone if I re-up up for 2 years.

In theory, I’m the consumer with all the power. I’ve got excellent credit, I like electronic gadgets, and I’m a free agent. In other words, I’m the customer every phone company should want and should be trying hard to get.

Except it turns out that’s not the case.

Ever since my beautiful and talented wife (The BTW) got one, I have lusted after an iPhone. Even though I really only use my current cell phone for…well…making phone calls, like many others I have been seduced by everything an iPhone can do. The Apple (AAPL) commercials that emphasize the apps over the phone apparently have had an impact on my thinking. Although really only use my iPod when I’m working out, having all my music with me at all times seems like a great idea. And being able to show my extensive collection of personal pictures to everyone I meet, take new photos, surf the web, and look up movie start times whenever I want seems like a dream come true.

Except The BTW tells me the one app I really use and need — the phone — is the worst thing about the iPhone.

But I decided to find out for myself. So I went to an AT&T (T) store a few blocks from my office (and which is conveniently a few doors down from a Verizon store so I could easily visit both if necessary, and the salesman flat out refused to answer any questions about the quality of the iPhone service. He said he was from California and not that familiar with the service on the east coast. He never had a problem with the service in the Golden State and, by the way, did I know how easy it was to watch a movie on the iPhone?

I asked for a manager. I was told none was available.

The “salesman” then talked proudly about how the IPhone has 36 gigs of memory. He went pale, however, when I mentioned that I had an 160 gig iPod Classic and 36 gigs wouldn’t come close to handling what it stored. He then said I could always keep my existing iPod and just use my new iPhone for everything else.

So, he wouldn’t answer my questions about the phone service and one of the non-calling features he was flacking wasn’t going to work for me. And, to be honest, as seductive as having an app for everything I could possibly imagine (Is there an app for helping you decide what phone to buy?) might have been, I decided that spending $200 or more for an iPhone wasn’t happening.

So I went a few doors down to the Verizon (VZ) store, gave then my cell phone number, and waited for them to court a customer whose contract was up and could bolt at any minute.

Wrong.

As soon as they heard that while 1 year was possible I wasn’t going to sign up for another two years because I wanted the freedom to move my account if they screwed something up, they became incredibly uninterested in me and my monthly payments. They couldn’t explain why a Droid was a better deal than an iPhone, or just a good deal at all. And they really lost interest when I said I just wanted to get a new basic phone to replace my now 5 year old Motorola Razr.

The one new phone I wanted was out of stock. But the listed $9.95 price was only good if I renewed my contract for two years; otherwise it was $449, which clearly was a rip-off for a phone that looked like it cost about $3 to manufacture. The “salesman” said it was $9.95 (if it had been in stock, of course) only because I would have paid for the remaining $440 over the 24 months of the 2-year contract he so desperately wanted me to sign.

(That begs an interesting question about my existing phone and contract: Since my current phone was paid for over the past 24 months, why doesn’t my current Verizon bill fall by the monthly amount that was priced in to my payment 2 years ago? Isn’t that a rip-off as well?)

So this is why I didn’t spend the money I had planned to spend this weekend. It’s also why, if you call me on my cell, I won’t be able to look up a movie start time while we’re talking.

I now return you to our regular mostly macro issue programming.

About Stan Collender 126 Articles

Affiliation: Qorvis Communications

Stan Collender is a former New Yorker who, after getting a degree from the University of California, Berkeley, moved to Washington to get it out of his system. That was more than 30 years ago.

During most of his career, Collender has worked on the federal budget and congressional budget process, including stints on the staff of the House and Senate Budget Committees; founding the Federal Budget Report, a newsletter that was published for almost two decades; and for the past 11 years writing a weekly column for NationalJournal.com and now RollCall.com.

He is currently a managing director for Qorvis Communications, where he spends most of his time working with and for financial services clients.

Visit: Capital Gains and Games

9 Comments on How Verizon and AT&T Stopped Me from Buying a New Phone

  1. Amen Brother. I have been in the same place for two months now. I picked up my Motorola droid last Friday and so far I love it. The things that pushed me to re-up for two years is 1. the new lower plan prices that start today and 2. I have 30 days to return and cancel if I decide a smart phone was not for me. My BTW loves her Iphone but the phone service is not good.(drops calls like it was 1991) The quality of the Droid phone calls has blown me away; and is important as I use it for business.

  2. Verizon & AT&T are disappointments. T-mobile who I was with before but left for the iPhone, i will be happily back with them this coming September when my contract is up. They are worth signing for as they had answered all my questions and are more than helpful. Plus, they now have a the fastest & full 3G network compared to AT&T this past week. might be something worth looking into.

  3. I completely understand your frustration here 100%!!! I hear horror stories like this about corporate stores all the time! The sad thing is I work for Verizon. I don’t understand why they told you it would be $400 if you wanted a 1 year contract. I work for an indirect agent and we just charge $20 more for the phone for all 1 year contracts. When you go to any carrier and see that awesome price of free or 9.99 listed generally this includes a standard $100 off the contract price and less any mail in rebates. At my store we just do $80 off for one year contracts. Also if a phone is out of stock that is our fault, NOT yours. So I am wondering why you were punnished for them not having a phone to sell you if it were at my store the price would be honored until we had the phone instock to sell. And last but not least, customers are never paying monthly for their physical phones. Your bill should be for your service, so that little tid bit about paying $440 over 24 months is beyond incorrect. I don’t know who you talked to but they must have been a total idiot or money hungry for commission because they definitely misinformed you or mislead you for what ever reason.

  4. I have been in the same position as well for the past 4 months! I have good credit, never missed a bill, love technology and don’t generally complain. Where I live at&t doesn’t have the greatest service and forget about the 3G. So Verizon is the best option. So, I was excited about the Droid and even the Nexus One that isn’t available for Verizon yet but am having a hard time convincing my self to spend an extra $30 for luxuries that will become necessities, which will be a fortune in the long run. Please keep us updated if you find a solution to this the problem!

  5. For under $25/month you can get 1200 minutes, 1200 messages (text or multimedia) and 50MB of data, on Verizon’s network, through their MVNO PagePlus.

    You can use any Verizon phone (including the phones Verizon sells for their own InPulse prepaid service) on PagePlus. There are no requirements that you sign up for a data plan if you have a smart phone (in fact there are no data plans with more than 50MB/month which can be a problem if you’re a heavy user of data because you pay per MB over 50MB).

    Of course you have to BYOP (bring your own phone), but if you do the math, it’s a no brainer to buy a phone then pay much less per month.

    I use a smart phone on PagePlus, my son uses a $6.95 (Fry’s) Verizon Inpulse Samsung U340 activated it on PagePlus (not the 1200 plan). This same phone sells for between $20 and $50 at stores like Walgreen’s, Wal-Mart, and Target. It’s the phone that looks like it cost $3 to make but it works fine.

    Personally, I’d love an iPhone. But the AT&T service is so bad (both 3G and 2G) in my area (San Francisco Bay Area) that it makes no sense. I’m not starting with the jail-breaking and activating on T-Mobile, because T-Mobile coverage is also poor.

    Verizon is following the oil company law of supply and demand, “we have all the supply, so we can demand whatever the $%^& we want.” They have the only decent network in the U.S. and they know it. If you say you’re leaving they don’t care all that much because they know you’ll be back after experiencing the horror that is the competition.

  6. Working for Verizon I can tell you that the reason for the sales reps less than enthused response to your only wanting a 1 year contract simply comes down to money. Verizon sales reps are partially commissioned and while it’s a rather complicated commissions structure that is quickly stripping their reps of their earnings (and knocking down their moral to boot…another story), when a customer signs a 1 year contract only HALF the cost of your line goes into their “Sales Dollar Bucket” as opposed to the whole amount for 2 year contract. So that means if you have a 450 minute plan with at $40/month, $20 would have gone into that sales reps “bucket”. (it also needs to be said this doesn’t = $20 for that reps paycheck…again, complicated). Not that any of this should be your problem or concern. I tend to more blame the creator of the policies than the customers that have outside of the norm requests. I think if the general public knew how their purchasing and returning of cell phones really affected their rep, Verizon would have some explaining to do.
    That being said, half is better than nothing and I’m sorry you were brushed off. Android is a fantastic operating system but I would push you towards the Eris or encourage you to wait for the Nexus One.

  7. I do not understand why cell phone service has not changed with the times. Why are we still having to sign up for one or two year contracts? Why are these companies still charging us outrageous sums of money for $20 phones?

    My husband lost his phone a few months ago and we had to activate an old phone we had because I refused to pay $200 for a basic cell phone for him. We already pay way too much for the monthly service because the most basic family plan includes 700 minutes per month even though we only use about 300 minutes combined.

    Our contract expires in August and I’ll begin researching all over again. Plans, phones, service, cost. It’s frankly obnoxious. I wish there was a better way.

    • Kristin,

      If you call Verizon customer service there are “loyalty” plans that are offered of lower rate minutes. This is often offered to keep you from seeking service elsewhere. I would play that up. As far as the price of the phone, that’s what the phones are worth, that is what the company (Verizon, AT&T, etc) paid the manufacturer for them. You see them as “$20 phones” because that is the SUBSIDIZED price that you are offered as bait to get you into a contract which is where the money is made. It’s not a sound business plan to offer the subsidized price any old time as these companies only make money off you in the second year of your contract (first year covers what they paid the manufacturer for your phone, cost of improving network, etc.)
      If you wanted the cell phone service to “change” with the times, you would be looking at paying a few hundred dollars for your device and putting it on any provider you want with no contract, which is precisely how they do it in Europe. I have a feeling this would be less successful in America because we’re always looking for a bargain *right now* and don’t really want to look down the line at a long term benefit like that.

  8. I’m in a bit of pickle, I have had my Apple iPhone 3G for the last 2 years and it’s been pretty good. It’s my understanding that Apple has a new update due out called OS 4 and it’s supposed to be adding some new bells & whistles to the Apple iPhone. I actually just bought Verizon’s new HTC Incredible the HTC Incredible and it’s a great phone, far superior to the Apple 3G, BUT I’m hearing that Apple is supposed to be coming out with a brand new iphone altogether, and it’s supposed to be really nice but no one has any ideas as to when and Apple isn’t saying a thing. Should I keep my HTC Incredible, that I have a month to test and give back if I don’t want to keep it, or should I give it back, keep my current 3G and wait for the release for the new iPhone- tough to make up my mind.

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