Automatic Cash-Back Mobile Phone Offers
For anyone unfamiliar with incentivised cell phone offers the term automatic cashback may seem a little peculiar or confusing. I mean, why would a mobile phone company give automatic cashback, and what is meant by automatic?
First of all it is important to realize that if you get a cellphone contract, it is not with one company, you are actually dealing with two (unless you go straight to the network operator). Typically you will purchase your mobile phone from a retailer, be they a store on the high street or on the web. You will then have to pay a monthlly bill to the mobile phone network. The relationship between the shop and the network provider is solely commision based. That is to say that the mobile network company pays sales commission to the store.
The retailer has absolutely no influence over the prices levied by the network provider, they are fixed. In order to sell contracts the store will typically invest some of the commission on incentivised deals for the customer. A few years back it was enough for stores to merely give away a free phone. This after all was a time when mobile phones were probibitively expensive and were a a kind of status symbol.
Today however, things work differently. Cellphones are more common and are much cheaper, so, mobile stores increasingly have to attract their customers with increasingly attractive incentives, for example free laptops or even free televisions.
Even So some consumers do not want additional free gifts, they want the cheapest cell phone offer possible, and this is where automatic cash back comes in. As the store cannot cut the monthly line rental of a cell phone rental, they offer to hand back some money to the consumer there and then. So, for example, if the consumer tries to negotiate a 20% discount in montyly line rental, the cellular phone retailer will simply calculate the value of thatdiscount and give them their cash imediately.
Automatic cashback deals are not to be confused with free line rental or cashback by redemption deals, in which consumers have to claim cash back later on in the contract. Because of unscrupilous terms and conditions attached to these claims for cashback many consumers never received their refund, and therefore lost faith in the cash-back by redemption offers.
So, the automatic cashback offer came into play. These offers promised more modest savings than the cash-back by redemption offers, but, the refund was guaranteed. It was automatic, paid to the consumer as soon as the contract was signed, and so, the term automatic cashback was coined for this kind of mobile phone deal.
For customers looking for an automatic cash-back mobile phone offer, without doubt, the easiest place to get one is online. Whilst it is possible to find one of these offers on the high street it is unlikely. For one thing, the high street phone stores cannot generally offer such good offers or promotions simply because their overheads are higher than those of the online competition (though their consumer service is often superior). Also, it is not easy for shops to make money with these offers. The profit margins associated with automatic cash back offers are so tight that they require constant monitoring, factoring in changes in the levels of commission paid and the price of of the phones themselves. This often means that the life of a certain promotion is quite short, once that ends you (as a consumer) have to wait for the next automatic cash back promotion to come along.
For this reason cell phone comparison sites are usually the best way to find an automatic cashback promotion, as they will show all offers by all online shops on one page. These deals are obscure, representing a tiny amount of the total number of offers on offer, and, you will have to accept an older less well featured handset in order to obtain one. But for the thrifty, automatic cashback deals are by far the cheapest way to run a mobile phone.