During our Lazy Geeks Podcast on Monday, we brought up the weird tactic of Best Buy charging an extra $100 for the iPhone X. The device cost $999 from the offset, but if you wanted to pay in full, Best would charge you an extra $100. Apparently, there was a similar markup on the iPhone 8, as well. After some criticism from the media, they offered this nonsensical response:
“Our prices reflect the fact that no matter a customer’s desired plan or carrier, or whether a customer is on a business or personal plan, they are able to get a phone the way they want at Best Buy,” Danielle Schumann, a company spokeswoman, said in an email. “Our customers have told us they want this flexibility and sometimes that has a cost.”
While the company’s response didn’t sit well with consumers or the media, Best Buy has opted to not offer the device at all for one lump sum. You will still be able to purchase the device through the wireless carriers monthly installment plans.
“Although there was clearly demand for the un-activated iPhone X, selling it that way cost more money, causing some confusion with our customers and noise in the media,” Best Buy spokeswoman Danielle Schumann told Bloomberg. “That’s why we decided a few days ago to only sell the phone the traditional way, through installment billing plans.”
Best Buy did issue a statement on the company’s website on Tuesday:
“Many customers told us they like to buy a phone that is not ‘activated,’ meaning it does not come with a carrier contract,” the company said in the statement. “This may be because they broke a phone and want to replace it or are on a company plan and not allowed to upgrade. To accommodate this, we gave consumers the choice to buy the iPhone X through installments plans with carriers or buy it outright, unactivated.”
“We tried something designed to offer choice but instead created confusion. We may try again at some point, only this time with better execution,” Best Buy added in its statement.
Part of their statement is true. Wireless providers do receive subsidies for devices, which allow consumers to purchase it on a low monthly payment. Unfortunately, those subsidies are not included on the outright purchased phone. Why? Consumers are paying full price for the device and no subsidy was involved.
Read between the lines, Best Buy was not receiving a dime from Apple, or profit, to sell it at full cost. Yet, other wireless companies will sell it to you at the same standard price. It appears that Best Buy figured you would pay more just to get the device from them.
The Verge reports that the iPhone X isn’t an isolated incident. The site claims that they have tried the same thing with Android devices. Even stating that when Best Buy offers “$100-, $200-, or $300-off sales, that pricing usually only applies if you purchase through monthly financing. The retailer presumably gets kickbacks from carriers when making those sales, and that bonus doesn’t apply to customers who just walk in and buy a phone outright.”