Can someone explain how the economics of phones and service plans work in a way that this make sense?

[donottaunthappyfunball]

I'm not a big phone user. Gotta have one, but you don't have to go through life face down in one. I've got a fairly decent smartphone with a yearly Tracfone plan that includes 1500 minutes, 1500 texts and 1500mb data. That's more than enough for how I use a phone, after 11 months I've gone through maybe 500 minutes, 200 texts and about 1GB data. The phone and plan combined were $50 or so and that's a great deal. The time has come that my yearly service plan is close to expiring and needs to be extended.

I have two choices here. I can either spend something like $125 or so to reload my existing phone with a new service plan that goes a year and includes 1500/1500/1500 like my current plan . Or I can throw this phone away so that it winds up in a landfill and buy a brand new phone of similar power and capabilities that includes a brand new 1500/1500/1500 service plan for a year for $50-$60 or so. It costs twice as much to buy an a la carte yearly plan than it costs for the same plan with a brand new phone included. I tried to talk to a Tracfone rep about that and it was like I was speaking Klingon with a French accent, He/She had absolutely no idea what I was talking about. It's an obvious choice, pitch the phone I have and get a new one with the same plan for half the price. But why is is like this? Who benefits from me throwing away a perfectly good phone to get a new one for so cheap that nobody is making any money on it?

 

[podspi]

That isn't their intention, they're trying to get you signed up with a lower price, then because you don't use your phone much, you'll pay full price for the plan because the bother to set up a new phone isn't worth it.

 

[Ravynmagi]

My speculation is the carrier is getting some kickback from the phone manufacture. And the phone manufacture doesn't mind almost giving away the phones because they put some much spyware, adware, and malware on the phones they are making more money off of your data.

 

[KeithP]

I tried to talk to a Tracfone rep about that and it was like I was speaking Klingon with a French accent, He/She had absolutely no idea what I was talking about.

Maybe that is because the deal on the new phone with service at the price you describe doesn't exist?

I was curious and went to tracfone's site and did not see such a deal on a new phone like you describe. How about you tell us specifically what phone you currently have and provide a link that shows the similar new phone that comes with the service at the price you mention.

-KeithP

 

[KentState]

Also, phones should be recycled, especially with the battery. If you are throwing them in the trash, then that's on you.