For anybody not familliar with incentivised mobile phone deals the phrase automatic cashback may seem a little peculiar or confusing. For example, you may wonder, why would a phone company give automatic cashback, and what exactly do they mean by automatic?
First of all it is essential to realise that when you get a mobile phone contract, it is not only with one company, you are in effect dealing with two (unless you go direct to the network operator). Typically you will purchase your cellular phone from a retailer, be they a high street shop or on the internet. Then you will be obliged to pay a monthly fee to the network provider. The relationship between the shop and the network provider is purely commission based. That means that the mobile network company pays commission to the store.
The shop has no way to influence the monthly fees billed by the network provider, they are fixed. To help promote more contracts the store may invest some of their commission on incentives for the customer. In the late 1990's it was adequate for them to simply give away a free phone. This after all was at a time when cellular telephones were probibitively expensive and were often seen as a status symbol.
These days though, things work differently. Cellular Phones are far more common and are much cheaper, so, retailers increasingly have to ply their consumers with more tempting incentives, for example free laptops or even free televisions.
Even So some consumers are not looking for free gifts, they just want the lowest priced cellular phone deal available, and this is where automatic cash-back is used. As the retailer cannot reduce the monthly line rental of a mobile rental, they offer to give back some money to the consumer on the spot. So, for instance, if the consumer tries to negotiate a Twenty Percent discount in montyly line rental, the phone store will simply calculate the value of thediscount and hand over the cash there and then.
The reason these deals are described as automatic cash back is that the earlier versions of these offers operated a process of cashback by redemption, whereby customers had to claim money back at the end of the contract. Due to dubious terms and conditions attached to these claims for cash-back many consumers did not received their cashback, and lost faith in the cash back by redemption offers.
So, the automatic cash-back offer was conceived. These offers promised more realistic savings than the cashback by redemption deals, but, the refund was guaranteed. It was automatic, given to the customer as soon as the offer was completed, and so, the term automatic cashback was conceieved for this kind of mobile contract.
For customers wanting an automatic cashback cell phone offer, without question, the best place to locate one is online. Whilst it is probably possible to find one of these offers on the high street it is far less likely. For one thing, the high street phone stores do not generally offer such good deals or incentives simply because their costs are a lot more than those of the online competition (though their customer service is usually superior). Furthermore, it is difficult for shops to make money with these offers. The profit margins associated with automatic cash-back deals are so tight that they require constant monitoring, factoring in changes to the levels of commission paid and the price of of handsets. This means that the shelf life of a specific deal is quite short, once that ends you (as a consumer) have to wait for the next automatic cash back offer to come along.
For this reason mobile phone comparison sites are usually the best way to find an automatic cash-back deal, 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 cash-back offers are by far the cheapest way to run a mobile.
First of all it is essential to realise that when you get a mobile phone contract, it is not only with one company, you are in effect dealing with two (unless you go direct to the network operator). Typically you will purchase your cellular phone from a retailer, be they a high street shop or on the internet. Then you will be obliged to pay a monthly fee to the network provider. The relationship between the shop and the network provider is purely commission based. That means that the mobile network company pays commission to the store.
The shop has no way to influence the monthly fees billed by the network provider, they are fixed. To help promote more contracts the store may invest some of their commission on incentives for the customer. In the late 1990's it was adequate for them to simply give away a free phone. This after all was at a time when cellular telephones were probibitively expensive and were often seen as a status symbol.
These days though, things work differently. Cellular Phones are far more common and are much cheaper, so, retailers increasingly have to ply their consumers with more tempting incentives, for example free laptops or even free televisions.
Even So some consumers are not looking for free gifts, they just want the lowest priced cellular phone deal available, and this is where automatic cash-back is used. As the retailer cannot reduce the monthly line rental of a mobile rental, they offer to give back some money to the consumer on the spot. So, for instance, if the consumer tries to negotiate a Twenty Percent discount in montyly line rental, the phone store will simply calculate the value of thediscount and hand over the cash there and then.
The reason these deals are described as automatic cash back is that the earlier versions of these offers operated a process of cashback by redemption, whereby customers had to claim money back at the end of the contract. Due to dubious terms and conditions attached to these claims for cash-back many consumers did not received their cashback, and lost faith in the cash back by redemption offers.
So, the automatic cash-back offer was conceived. These offers promised more realistic savings than the cashback by redemption deals, but, the refund was guaranteed. It was automatic, given to the customer as soon as the offer was completed, and so, the term automatic cashback was conceieved for this kind of mobile contract.
For customers wanting an automatic cashback cell phone offer, without question, the best place to locate one is online. Whilst it is probably possible to find one of these offers on the high street it is far less likely. For one thing, the high street phone stores do not generally offer such good deals or incentives simply because their costs are a lot more than those of the online competition (though their customer service is usually superior). Furthermore, it is difficult for shops to make money with these offers. The profit margins associated with automatic cash-back deals are so tight that they require constant monitoring, factoring in changes to the levels of commission paid and the price of of handsets. This means that the shelf life of a specific deal is quite short, once that ends you (as a consumer) have to wait for the next automatic cash back offer to come along.
For this reason mobile phone comparison sites are usually the best way to find an automatic cash-back deal, 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 cash-back offers are by far the cheapest way to run a mobile.
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