IAMA Former Cellphone Store Manager for a major retailer, ever wanna know the secrets of the devious cell phone industry?

If you were just a store manager I can assure you that you don't know the half of how devious the deviousness goes.

I would counter with the fact that even though we don't make the decisions that effect customers and policy in general, we are privy to all the internal communication from Corporate as far as the what/why/how of new policies, devices, etc.

What are some secrets that we as consumers can use to get better deals, cheaper prices, free things, etc.?

Get a person, in person, at a store. They are more willing to do things for customers than anyone over the phone ever will be. For better phone prices, always go to an indirect retailer since they don't build part of the cost of their salespeople's commission into the cost of the phone. For billing matters, go to a corporate store and just get a manager. When you are face to face, people are much more likely to be helpful. The call centers do occasionally help people out, but they see you as Call # 123123214 of 324235139413049340 and just don't care all the time.

Granted, some managers in stores are just assholes anyways, but based on my experience, in person is much much better.

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People who walk in and tell the manager "Help me out or I'm returning all this crap" generally get the BEST help, haha. Since the people in the stores are usually commission based, that's a big hit. That being said, depending on the store, the phone carrier itself has little buffer margins built in to keep their associates a little more honest. This means that a set number of returns/exchanges/credits per month is acceptable based on % of sales.

My family is currently trying to figure out a strategy to keep our "no longer offered" unlimited data plan. It looks like were going to have to buy used phones from now on, any advice?

What phones and carrier do you have now?

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Android, probably on a no-contract. You can usually find free tethering apps on Android market, at least from time to time.

I am currently working as a sales rep with a few manager duties (simple stuff like phone orders, pricing, and low-level decision making) for a very small indirect retail store (4 employees). We sell phones for one of the country's largest providers as well.

My question is:

I can't tell if we get a horrible deal or if everyone is treated this way, but do you guys lose commission and the cost of the phone if a customer you activated in-store cancels their contract within 180 days? Sometimes our profit months become non-profit months because a customer cancels their contract from 3 months ago. Our provider takes back all the commission they gave us on it, AND we don't get the phone back. It's a huge loss for the store.

The charge backs (or churn rate) you are talking about do hit everyone, but depending upon the company selling the phone and the carrier and their agreement, sometimes the carrier will allow a certain % of charge backs in a given time frame before it effects profit for the store.

Ok, so what's the least-expensive way to get out of a contract? I know they have early termination fees but is there a way around that if I ask really, really nicely?

The most sure-fire way to get out of a contract is to legitimately live in an area where (by the carrier standard) you spend 60% of your time with little to no reception. They will let you right out, though they may send a technician out to test first. Other than that, we would have trouble with people we called "resellers" who would do this:

• Come in and buy five new phones at $200 each. ($1000 invested).
• Each phone may be worth $699 without contract ($500 difference per phone)
• Each contract may cost $350 to break early.
• The phones are then sold on eBay or Craigslist for as close to that $699 as they can get. Depending on the phone and how long it's been out, they can easily get full retail. Some phone launch in the U.S. before Europe also, or don't come out over seas at all, so the demand (and price) can be much much higher.

Even with the full retail price, that's still a net profit of about $750, which can easily be worth it for someone to do this little scam. That being said I DO NOT RECOMMEND YOU DO THIS.

Stores like mine kept good customer info on hand and we could easily see trends where the same customer had hit two stores for 5 phones each and we would blacklist them in a heartbeat.

Is this why Apple put a limit on how many iPhones you could buy or something similar I heard about one time? I just remember the news making a big to do because some guy couldn't buy all the iPhones he wanted.

A lot of stores and companies have per-transaction limits. For example, where I worked if you came in wanting 5 of anything, policy would say you could only have two. In the end, it's up the the manager's discretion in many cases.

How much is the commission a salesperson gets for getting a customer to buy a smartphone and 2 year contract?

It depends heavily on the device, the plan, and features for the account. Also the number of lines activated, obviously. An average could be $100-$150 just for the first line activation, then everything else is almost like a multiplier of commission bounty.

Do they explicitly talk about the planned obsolescence of cell phones?

It's actually less planned obsolescence as it is a shortcoming of the sales/purchasing culture. For example:

You bought the Droid "Whatever" on January 1st, 2013. Maybe it's made by HTC. HTC is still developing new technology, new software, new products as fast as possible. The downside is that you are in a 2-year contract (usually) for that "Whatever". So when HTC gets it's new model off the line 2-3 months later, you get that feeling of planned obsolescence, but it's really more due to the fact you feel stuck with the "Whatever" because of your contract and the high fees to break it early to buy the "Whatever 2.0".

my reply to this would be that it seems that phone technology is sort of hitting a point of diminishing returns in the last couple of years similarly to how computers have done and has left the average consumer more or less satiated with what they have.

Back when I had my old mytouch 3g phone, it was a MASSIVE leap forward from my old blackberry pearl but when that contract ended, I got the mytouch 4G and the only main difference I felt when switching was a slightly bigger screen, newer version of android and a better camera. Sure it could do things a bit quicker but not quick enough that I though "how did I ever manage without this new speed!".

In December, I retired the MT4G and jumped on a nexus 4 and again, it feels like a very minor upgrade in terms of what the phone actually does for me and enhances my quality of life. Again, a bit bigger screen, better version of android and a better camera. That's it. That is where the cell phone market is stuck. There is nothing MAJOR happening that is revolutionizing the phone the way that jump from a flip phone to a touch screen blew everyone away.

Phones like the GSIII and iphone 4/S are going to remain incredibly common I think because they handle just about everything a person could ask for out of a smart phone.

When I got my MT4G, I told myself that I could see myself using that phone for a long time and honestly, if my nexus 4 broke or I couldn't use it and I had to fall back on the MT4G, I wouldn't feel like I was suffering aside from not having a few apps that require a newer version of android than Gingerbread which is the rom I'm using on it.

If I had to go back to using this thing.... my god... my life would be crippled. (first world problems)

http://i.imgur.com/Wawz4.jpg

(Still works great though, takes hilariously bad pictures/videos and text/MMS functions great)

Part of this sensation comes from the frequency of incrementally released improvements in the industry. Technology is exponential in growth, but in the cell phone world products are released so frequently that consumers are almost given a linear picture of the technology changing. This means that instead of seeing those huge leaps every couple years you are witness to, and inundated by, the tiny little incremental steps along the way.

Just curious because there have been 3 cell phone store robberies in my area in the past 3 months, do you guys really carry that much valuable merchandise at once? Because every time I want a new phone I have to wait a month for it to be shipped.

I am in no way telling you to go rob a store, but yes, the store I worked for probably had $30-$50k in merchandise at any point in time. Albeit locked up rather securely in our storeroom.

Chinese phone stores in chinatown can give you money back if you sign up for 2 year contract without phone. There's one advertising 3 free iphone 5s and $1900 money back for signing a family plan. Chinese phone stores are much cooler aren't they?

Wait, so they want you to sign up for the contract and not get a phone? or they do give you the phone?

I hate sprint, but unfortunately have a near 2 year lock in with them. How the fuck do I get out, so I get get googles phone and a pre paid plan?

fuck sprint.

Most carriers will prorate their cancellation fee after the first year of service, so that could help some at least. Other than that, you can keep pressuring the customer service people about you "not having reception anywhere". The catch is, they can easily check your voice and data usage so you have to not use the phone to try this little "trick." Unless of course you don't actually have reception. The thing is, you entered a legally binding contract. The question most people really need to ask themselves is:

Take the remaining months of the contract (A) and multiply times the average montly bill (B). Then call up the carrier and get a firm idea on the full cancellation fees (C). If A x B is less than C, you should try to hang in there. If C is lower, just take the higher up-front hit and break contract.

Whats the single lamest thing you charged people for? Like ones even the employees are like 'yeahhhhhhhhhhhh.......Sorry bout that'.

Our stores used to charge people to transfer their data from phone to phone/SD card. Contacts, pictures, etc. Basically making you pay for your own information, ha. The company no longer does that, thankfully.

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You sign a contract agreeing to pay a SET rate for services rendered/provided. They also legally agree not to change MOST of those rates without notice or explanation. Therefore, go through your bills and try to find places where a rate that is NOT based on usage has gone up. For example, going over your minutes raises your rate, and that's your fault. But one of their general fees, taxes, etc should always be the same.

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It is a technical violation of the contract on their part, I've had success doing the same for other customers.

you should know .. This information is not completely correct. Tax rates are not included in the contract and they have nothing to do with the company. Its tax. Government.

An FCC based tax, yes, but there are many fees and such assessed by the company that are supposed to be flat rates. Don't get hung up on one word.

As my contract ends, are there any tips or tricks you'd recommend to save money should I decide to renew with the same company? (or tips to save money transitioning to a new company)

I always recommend shopping around at the end of your contract. Normally your "upgrade date" is going to be available around the 18-20th month, meaning that you can stick with the same company a little earlier than you are actually allowed to leave with no penalty. A lot of carriers are beefing up their no-contract offerings these days to compete with people not wanting a high bill. The trade off is the higher up front cost. One nice thing there is that if you have a GSM carrier (one that uses SIM cards) then you can usually take your same phone, provided it suits you, and just go straight to no contract with it. You won't be getting a snazzy new phone, but you'll be generally cutting your bill.

In any case, I recommend you do your research. Think about where you really use your phone most (home, work, school) and what you use it for. If you are like me and have Wifi everywhere, then take that into consideration, for example.

I've never been able to justify the horrendous expense of a smarthphone. I have an 80gb hard drive based iPod and the times I think "God, I need the internet right now, not in a few hours when I get home" I can count on my hands in the last two years. How much do dumb flip phones actually cost- the ones you give away free or for 20 bucks with a contract and cost something like $200 if you lose it before your contract is up?

When I left my company, our assortment was hovering right around 70% smartphones vs 30% "basic" phones. That being said, the basic phones or even "feature phones" (like having a sliding keyboard for texting) are still kinda pricy to manufacture and distribute, hence the $300 price tag on most.

That being said, if you have a GSM carrier (ATT, T-mobile, Net10, or any other carrier that uses SIM cards) then you can buy any phone at all that is made for the same carrier and just swap your SIM card over. For example, I have ATT (Not who I worked for) and I use Android. When I go hiking, I have a little cheap flip phone that I just put my SIM card into. That way if I smash it or drop it in a river or something, I don't lose much.

My question, do they really need to advertise new phones for 500+ dollars? I mean they only cost like 10 dollars to make right?

A lot of the cost comes from the screens themselves, especially if they are more shapely than just being a flat rectangle. Every little bevel, angle, and contour costs extra as it makes manufacturing much more costly because machines now have to be calibrated just for that one screen rather than stamping out a zillion rectangles. After that, the bulk of the cost goes to: The purchase and use of rare earth elements in the electronics, then to licensing for software and such. Essentially you're buying a little laptop computer for your pocket.

What in your opinion is a way around this to manufacture the screens to make the phones cheaper? Also what about ipods/ipads screens?

The issue is people want durability from glass, and there's only so much you can do before it just becomes too costly. Even "Gorilla" glass shatters, just not as easily. The next step in the technology is likely going to be a move towards a lightweight, cheap, flexible polymer that can act as a touch screen even after been bent or rolled up or folded.

This is the worst ama ever. Not only is the topic irrelevant, the expertise behind it is dodgy at best. I'm sure during the secret store manager meeting they told you all the juicy details on how they have their dick in the ass of every American. What made you become a former manager? Spilling dirt on higher ups?

You're absolutely right! They have these big meetings called "How We Fuck Over Customers" and they make them mandatory. Knowledge is certainly never gained from raw experience, it has to be given in Top Secret Press Release format......