You don’t want to spend $100 more to pay upfront for the latest iPhone models? Fine, we wont sell you the iPhone. How about them apples?
That’s essentially the stance Best Buy has taken in the wake of consumer backlash from news that the company was charging consumers more to buy the phone upfront instead of through an installment plan. Bloomberg first reported earlier today that the company has decided to only sell the iPhone X and iPhone 8 with installment plans.
When Best Buy began offering pre-order of the iPhone X last week, it was asking $100 more for customers who didn’t want installment debt. The Apple store allowed customers to buy the phone upfront without paying the extra $100. The iPhone X with 64GB on the Apple store or through the Best Buy installment plan cost $999. However, to buy that same phone upfront at Best Buy, it cost $1,099. For the iPhone X 265 GB, the price difference was $1,149 and $1,249.
Best Buy has also been selling the iPhone 8 and iPhone 8 plus for $100 more than its normal retail price, for those who paid for it all at once.
The day the iPhone X was made available for pre-order, a Best Buy spokesperson explained the company charged more for upfront pricing because “Flexibility has a cost.”
“Sometimes customers aren’t able to purchase phones at other locations because their desired plan or carrier makes them ineligible,” the spokesperson told Gizmodo. “That’s not the case at Best Buy, as our prices reflect the fact that no matter their desired plan or carrier, or whether a customer is on a business or personal plan, they are able to get a phone the way they want at Best Buy.”
That explanation for the pricing wasn’t enough to keep customers from complaining, and now Best Buy has decided to only sell the phone to customers who will pay for the device with a monthly installment plan.
Best Buy did not immediately respond to a request for comment on its decision to no longer provide upfront sales of the iPhone 8 and iPhone X, but a spokesperson told Bloomberg: “Although there was clearly demand for the un-activated iPhone X, selling it that way cost more money, causing some confusion with our customers and noise in the media… That’s why we decided a few days ago to only sell the phone the traditional way, through installment billing plans.”
That is a slightly more frank explanation of the pricing difference: Best Buy gets paid by carriers when the company sells phones that are set up through those carriers. If customers buy the phones upfront without a carrier attached, then Best Buy misses out on that money from the carriers.[Bloomberg]