Nov 09 2009
Verizon Wireless: overly complicated pricing
I’ve always had the opinion that simplicity is the key to a successful product or service. Verizon Wireless apparently does not have the same opinion. I visited a Verizon Wireless store yesterday to exchange a newly purchased phone with a different model. The “old” 2-week old phone had a poorly designed speakerphone that caused the recipient to hear an echo.
During this hour-long Verizon Wireless store experience, I learned about the following complications with Verizon Wireless fees and billing:
- There is a $35 restocking fee if you exchange your phone for a different model or color, or if you return your phone and buy a new one within 3 days. There should be no restocking fee if you return your phone and buy a new one in 4 days, however the Verizon computer system forces the employees to charge a $35 restocking fee even if a customer is simply returning their phone. A manager can override the fee, though some stores do not have managers working during all business hours. In my case, I had to drive to to a different store that had a manager that could help me.
Solution: Verizon Wireless needs to change their computer system so employees can process returns without charging the $35 fee. Currently, their computer system doesn’t allow them to follow their own restocking fee policy. Also, when the sales people happily advertise that you can return or exchange your phone within 15 days, they need to be clear and up-front about the $35 restocking fee rule.
- The “upgrade” price for a phone a 2-year contract extension on an existing account/phone number is higher than the price for a new phone that is attached to a brand new phone number. To offset that, Verizon offers a “new every two” program that gives certain eligible users a credit towards the cost of a new phone. They also charge a $35 activation fee for new lines of service, but not for upgrades.
Solution: Get rid of the “new every two” deal. Don’t charge a $35 activation fee on new activations. Make the cost of a phone for a new line of service or an upgraded existing line the same. That may mean that the cost of a phone on a new account needs to go up slightly, while the cost of a phone upgrade needs to go down slightly. The end result should be consistent prices regardless of if you’re a brand new customer or if you’re upgrading your existing account.
- The cost of a phone on verizonwireless.com is usually less than the cost of the same phone in a Verizon Wireless corporate store. Example: the Samsung Alias 2 is currently $50 online (after a $50 instant rebate), but it is $150 (after a $50 mail-in rebate) in-store. I found this out the hard way by purchasing the Alias 2 in-store. I now lost $100, and am not a happy customer.
Solution: Make the online prices match the in-store prices. I don’t care if the stores have more overhead cost. Whether you buy in-store or online from Verizon Wireless, they are the same company. Raise your online prices and lower your in-store prices if you must….just make the prices consistent.
- One corporate-owned Verizon Wireless store that I visited charges $10 to transfer contacts from an old phone to a newly purchased upgraded phone. This policy is non-negotiable. Two other Verizon Wireless stores that I visited (both old Alltel stores) clearly state that phonebook transfers are free if you purchased an upgraded phone.
Solution: Come up with one policy and enforce it across all of your corporate-owned Verizon stores.
During my hour of time in the Verizon store, I saw 3-4 other customers come in. Every single one of them had similar pricing issues that were a direct result of the issues above. Every single one of them walked out of the store as unhappy Verizon Wireless customers. Each of them are now at risk to Verizon of leaving and going to another company. If Verizon wants to retain customers (and good employees), they need to make sure that all customers walk out of their stores happier than when they walked in. The easiest way to accomplish this is to make their pricing and policies more consistent.
