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Thursday, December 07, 2006

Random Tips: Purchasing a Cell Phone at Costco


As most you of know, cell phones tend to break or malfunction after a few years...sometimes not even that long. If we're unlucky, we probably end up like most poeple, purchasing a new phone. Being an existing customer also doesn't allow us to get much of a rebate on the phones...which strikes me as odd, since we are the ones loyal to them, and the new customers get the great deals on the phones. Some people go for the equipment protection plan. This is pretty decent as long as you pay your service provider monthly, which usually allows you to get your phone repaired or replaced either with the same phone or the most simliar phone (if your phone is discontinued). But there's a better way...Costco!

First, let me show you what the equipment protection plan is for the 4 major cell phone providers:

So you're basically looking at $60-72 additionally every year in insurance for your phone. Keeping this in mind, let's talk about purchasing a phone from Costco.

Basically, there is a vendor who sells cells phones and plans at Costco. In the past, Costco only carried Sprint phones. Now, they carry Sprint, T-mobile, and Verizon. They offer the same prices and promotions, but tend to be a few dollars cheaper...on the average of $5-10. At worst, the price of the cell phone is the same as if you bought it at the respective store. Not a biggie. So why would buying a cell phone at Costco be better?

1. Not only is the phone cheaper by a few bucks, but they throw in the accessories for FREE. That usually includes a case, car charger, and a headset. That's probably around $40-60.

2. And the most important reason. The unconditional return policy. Yes, you can return your phone as long as there is something wrong with it (it doesn't have to be a major problem...my problem for my old phone was that the menu button only worked if you pressed it hard enough, but it wasn't a major problem). For how much you ask? The exact price that your purchased your phone for. It can be 6 months old or 2 years old...it doesn't matter. Costco does not buy back at the depreciated price...they give you back exactly what you pay them. So what does this mean? You can basically upgrade your phone every year by returning your phone for its full price and purchasing another phone. If the newer phone costs more, you just pay the difference. If it costs less, you get money back. But the kicker here is that you basically only have to purchase a phone ONCE at Costco, and you can change your phones as many times as you like.

This also means you don't have to pay for the additional equipment protection plan, because Costco offers this to you for free with their unconditional return policy. That saves you $60-72 annually. The only benefit the equpiment protection plan has over purchasing a phone at Costco is that the plan offers, usually with a non-refundable deductible (usually $50), coverage for lost phones. Although you have to pay $50, it is still cheaper than buying a brand new phone. Besides that, purchasing a cell phone at Costco is a much better deal. Here's a summary:

Pros:
- You can always return your phone
- You get back what you paid for it, no matter how long you had your phone (no depreciation)
- Free accessories
- You save $60-72 per year because you don't need to purchase the equipment protection plan
- You can get phones from the 3 largest cell providers...Sprint, Verizon, and T-mobile

Cons:
- Unconditional warranty does not cover lost phones

Labels:

76 Comments:

  • I went through 3 phones using Costco, and upgraded my phone each time. I wouldn't buy phones anywhere else. Plus, who else will accept used phones for full price? Good read.

    By Anonymous CK, At January 11, 2007 9:07 AM  

  • I can see your point, but Costco doesn't carry a lot of phones...mostly 3-4 phones per service provider. And usually they aren't phones that I like.

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