Mobile phone cashback
Encyclopedia
Mobile phone cashback when relating to mobile (or cell) phones
is a term used to describe a retail
er offering potential customers
' cash
at a future date in exchange for entering into a minimum term contract for a mobile phone, often on the condition that the customer keeps to the terms of the contract (i.e. pays their bills on time).
In the above example the retailer may advertise the contract as being £20 a month for 12 months. Usually, the customer will pay the £40 per month directly to the network and subsequently claim £240 in the form of cashback from the retailer, in one or more payments. This ihttp://www.tipped.co.uk/listings/148281/microhards aimed to make the deal seem cheaper for the customer to entice them to enter into the contract and for the network and retailer to gain an additional customer.
Some cashback deals are paid in one lump sum and some (the majority) are paid out in a set month during the contract term.
An example, £400 total for a 12 month contract with £300 cashback will be paid with £100 in month 4, £100 in month 7 and £100 in month 11. This pays the customer a total of the £300 cashback.
, O2, Orange
, T-Mobile
, Virgin
) will say to a retailer (Phones 4U
, The Carphone Warehouse
and independents), "We will pay you £500 if you bring us a new customer". Once this offer has been made, the retailers then decide what they want to do to bring in that new customer. Many cash back offers are based on a retailer's meeting a target set by the network, which will give it a bonus payout from the network operator along with commission paid for every connection.
From the £500 gotten for a new customer, it might offer £300 cashback meaning they entice a new customer in with a £300 cashback offer, they get that new customer and they have £200 left for their profits (£500 - £300).
Some say that the true reason to combat fraud. Some customers choose not to continue to pay their bills and most networks claw back their commission from retailers in such cases. The customer is then pursued by the network for non-payment, but as the network has clawed back its commission from the retailer, the only party that is truly out of pocket is the retailer.
This type of customer is called a neverpay. Retailers introduced cashbacks, which at first were meant to hold back a portion of money which that be claimed only once the customer had paid the bills. The gave the customer an incentive to pay their bills and it brought neverpay rates down somewhat.
Many retailers confused this as an opportunity to exploit innocent customers by promising to pay them cashbacks but not fulfilling their promise, which was when things started to get out of hand.
Customers should always check at the time of going in to contract what the procedure for a cashback is, as many smaller outfits use such a scam operation. Some are known to get aggressive when challenged. One such group is Microhard Telecommunications with tiny shops in Slough and Alperton.
Mobile phone
A mobile phone is a device which can make and receive telephone calls over a radio link whilst moving around a wide geographic area. It does so by connecting to a cellular network provided by a mobile network operator...
is a term used to describe a retail
Retail
Retail consists of the sale of physical goods or merchandise from a fixed location, such as a department store, boutique or kiosk, or by mail, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. Purchasers may be...
er offering potential customers
Consumer
Consumer is a broad label for any individuals or households that use goods generated within the economy. The concept of a consumer occurs in different contexts, so that the usage and significance of the term may vary.-Economics and marketing:...
' cash
Cash
In common language cash refers to money in the physical form of currency, such as banknotes and coins.In bookkeeping and finance, cash refers to current assets comprising currency or currency equivalents that can be accessed immediately or near-immediately...
at a future date in exchange for entering into a minimum term contract for a mobile phone, often on the condition that the customer keeps to the terms of the contract (i.e. pays their bills on time).
Structure and mechanism
For example the contract might cost £40 per month for a minimum period of 12 months, this works out at £480 for the 1 year minimum period.In the above example the retailer may advertise the contract as being £20 a month for 12 months. Usually, the customer will pay the £40 per month directly to the network and subsequently claim £240 in the form of cashback from the retailer, in one or more payments. This ihttp://www.tipped.co.uk/listings/148281/microhards aimed to make the deal seem cheaper for the customer to entice them to enter into the contract and for the network and retailer to gain an additional customer.
Some cashback deals are paid in one lump sum and some (the majority) are paid out in a set month during the contract term.
An example, £400 total for a 12 month contract with £300 cashback will be paid with £100 in month 4, £100 in month 7 and £100 in month 11. This pays the customer a total of the £300 cashback.
Aims and origin
The way Cashback start is a network (VodafoneVodafone
Vodafone Group Plc is a global telecommunications company headquartered in London, United Kingdom. It is the world's largest mobile telecommunications company measured by revenues and the world's second-largest measured by subscribers , with around 341 million proportionate subscribers as of...
, O2, Orange
Orange SA
Orange is the brand used by France Télécom for its mobile network operator and Internet service provider subsidiaries. It is the fifth largest telecom operator in the world, with 210 million customers . The brand was created in 1994 for Hutchison Telecom's UK mobile phone network, which was...
, T-Mobile
T-Mobile
T-Mobile International AG is a German-based holding company for Deutsche Telekom AG's various mobile communications subsidiaries outside Germany. Based in Bonn, Germany, its subsidiaries operate GSM and UMTS-based cellular networks in Europe, the United States, Puerto Rico and the US Virgin Islands...
, Virgin
Virgin Mobile
Virgin Mobile is a brand used by many mobile phone service providers across the globe; its headquarters are based in the United Kingdom. Virgin Mobile has local operations in Australia, Canada, France, India, South Africa, Greece, United Kingdom and the United States. It briefly also had operations...
) will say to a retailer (Phones 4U
Phones 4U
Phones 4u is a large independent mobile phone retailer in the UK. It is part of the 4u Group based in Newcastle-under-Lyme, Staffordshire. Since opening in 1996, it has expanded to over 550 stores throughout the United Kingdom. - Company Background :...
, The Carphone Warehouse
The Carphone Warehouse
Carphone Warehouse Group PLC , known as The Carphone Warehouse, is Europe's largest independent mobile phone retailer, with over 1,700 stores across Europe. It is based in the United Kingdom and is a 50% subsidiary of Best Buy...
and independents), "We will pay you £500 if you bring us a new customer". Once this offer has been made, the retailers then decide what they want to do to bring in that new customer. Many cash back offers are based on a retailer's meeting a target set by the network, which will give it a bonus payout from the network operator along with commission paid for every connection.
From the £500 gotten for a new customer, it might offer £300 cashback meaning they entice a new customer in with a £300 cashback offer, they get that new customer and they have £200 left for their profits (£500 - £300).
Some say that the true reason to combat fraud. Some customers choose not to continue to pay their bills and most networks claw back their commission from retailers in such cases. The customer is then pursued by the network for non-payment, but as the network has clawed back its commission from the retailer, the only party that is truly out of pocket is the retailer.
This type of customer is called a neverpay. Retailers introduced cashbacks, which at first were meant to hold back a portion of money which that be claimed only once the customer had paid the bills. The gave the customer an incentive to pay their bills and it brought neverpay rates down somewhat.
Many retailers confused this as an opportunity to exploit innocent customers by promising to pay them cashbacks but not fulfilling their promise, which was when things started to get out of hand.
Customers should always check at the time of going in to contract what the procedure for a cashback is, as many smaller outfits use such a scam operation. Some are known to get aggressive when challenged. One such group is Microhard Telecommunications with tiny shops in Slough and Alperton.