In August 2021 we officially migrated our long held Sprint cellphone accounts over to T-Mobile. When doing so, we took advantage of a trade-in deal to exchange Caleb’s phone for a new iPhone 12. The deal provided a monthly rebate of $28 towards the $34 per month purchase price, leaving us a cost of $6 per month for 24 months. As of this month, eight months of payments was to remain equaling approximately $276 as the balance.
Last month I traded my iPhone 11 for the iPhone 14, taking advantage of another trade-in offer. This offer was to provide a $400 rebate in exchange for my old phone. I learned that T-Mobile has two parts to such rebate offers. First is a lump sum payment for the Fair Market Value (FMV) determination and, if FMV is less than the $400 offer, the balance is a monthly rebate over 24 months.
The FMV of my old phone was $205, leaving $195 to be received as a monthly credit. I was told the $205 would be applied to my account. Today I received our first invoice with the new phone incorporated. I expected the account to carry a credit balance due to the FMV credit, but instead I was charged the full monthly amount. As I inspected the details of our account, I found the credit had been applied towards the balance owed on Caleb’s phone, bringing his balance to $71 and reducing payments by 5.
On the surface, it sounds reasonable to apply the discount to this other device, except it isn’t. If you recall, that device is receiving a monthly discount of $28, so by reducing the payments by 5 months, I only receive $30 of the $205 and T-Mobile keeps $175!
T-Mobile customer service representative was extremely pleasant and helpful when I called. They offered no resistance to moving the credit from the device to simply an account credit. In fact, I have not had a bad experience yet with any of their customer service staff since the merger with Sprint.
I don’t know if it is a standard practice to apply these discounts to a device on the plan rather than as a credit onto the account, but I assume many people take advantage of these trade-in offers and it seems to be a convenient way for a cellphone company to reduce their overall liability at the expense of unsuspecting customers.
So pay attention to how your discounts are applied. Even if, like me, you’d rather just purchase the item instead of making installment payments, it may be in your best interest to choose the payment route. But know that you typically have to go the distance, in terms of payment months, in order to receive your quoted offer in full.