Is there still a place for mobile phone cashback deals?

Now that the dust has settled from the 2007 fallout on mobile phone cashback deals we take a look to see what all the fuss was about and whether they are still any good for you…

For the unfamiliar cashback deals are where a mobile phone retailer offers to give you some of the commission that they receive from the mobile phone network (3, Orange, Virgin, T Mobile, Vodafone, O2). Surely a good thing eh?

Well yes and no. What mobile retailers realised was that if customers had to claim this cashback in installments over a number of months then there would be a drop out in the number of customers who would remeber to claim this cash.

In the early days only around 30% of people bothered (or remembered) to claim this cashback on their mobile. This was great for the retailer because after the claim period had closed they could pocket the cash. It was actually quite good for the consumer as well because the mobile retailer thought “well if only a third of people claim the cashback I can offer a cashback three times as large because only a third will take it up”. This lead to a massive rise in cashback offers for consumers.

While this was happening the consumer watchdogs were pretty silent. No doubt because their consumers were getting amazing deals that could offer a 12 month refund on line rental on a 12 month contract!

The problem came when consumers got wise to this and started to diarise their cashback claim timetable (ie send back voucher in month 3, 6 and 12 etc..). The rise of Microsoft Outlook’s diary system meant the fall of many cashback retailers!

Instead of only 30% of people claiming it ended up that 70% of people claimed. Some of the smaller mobile phone retailers had already spent the cashback that they didn’t think was going to be claimed and so all of a sudden they were having to pay cashbacks from money they didn’t have.

There were then a number of high profile mobile retailers who went bust leaving many customers waiting for their cashback that never arrived …. no matter how well they had diarised it in Outlook!

Where sleeping watchdogs had once lay, they awoke with howls of constantation and cashback became the dirty word of the mobile industry.

So where does that leave the consumer? Are cashbacks good or bad?

We think that the only logical conclusion is that if retailers offer a sensible cashback that they account for financially and allow the customers to claim it in an easy to use way then why not? Giving value back to the consumer has to be a good thing surely?

So if you are looking for your next mobile provider we suggest that you select a straightforward deal from a reputable company and to claim your cashback in one easy to use step rather than months and months of diarising.

And of course it just so happens that these are available at Mobilesplease !

Comments are closed.