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Dodging Verizon's $30 upgrade fee

Verizon is the latest carrier to impose a charge for upgrading to a new phone, but there are ways to get around it.

By MSN Money Partner May 9, 2012 12:30PM

This post comes from Ben Popken at partner site SmartMoney.


It's hard to say which will annoy customers more: Verizon's latest cellphone fee or the company's unlikely justification for imposing it.


Image: Businesswoman on cellphone (© Corbis)In recent weeks, Verizon started charging existing customers $30 to upgrade to a new phone when they renew their contract. AT&T and Sprint charge $36 and $18, respectively, for the same thing, so one might forgive Verizon for just doing what everyone else is doing.


But Verizon's excuse for adding the charge is pretty rich. The millions the company rakes in from the fee will be used to offer customers "wireless workshops" and "online educational tools," among other things, spokeswoman Brenda Rayney told SmartMoney. According to the press release announcing the fee, there will also be "consultations with experts who provide advice and guidance on devices that are more sophisticated than ever."


Here's an idea: How about I let you know when I want to spend my Saturday hanging out in a Verizon store learning things I could read in the manual -- and then you can charge me a $30 admission. Otherwise, I'm good.


What twists the knife harder on this latest move is that just a year ago Verizon abandoned its "New Every Two" program, which gave customers signing renewing two-year contracts $30 to $50 off their new phone. So now, not only do you not get the $30 credit when you upgrade, you have to pay them a $30 fee to get the new phone. That's as much as an $80 price hike! (When I asked about this point, Verizon declined to comment.)


Sure, in out-of-pocket terms, $30 isn't that much. But to pay for "wireless workshops"? Say that it's for building out the 4G network, or, better yet, say, "Hey guys, we feel like making more money and -- at least we don't charge as much as AT&T." Don't insult our intelligence.


Ways to get around the fee

Annoyed, I looked into ways for avoiding the $30 upgrade fee. (Post continues below video.)

For starters, Verizon suggests it may be possible to offset the fee by trading in one's old phone. "While trade-in values vary, they can get 'cash' in the form of a debit card for their older phone and use that money to help offset the Upgrade Fee," Rayney says. You can check out that program here.


Customers may even get a better price selling the phone on their own and keeping the cash. However, while iPhones tend to hold their value, many less-desirable phones may not cover the $30 fee.


Another promising-sounding alternative I researched involved a three-step switcheroo. First, start a new line of service with the new phone you want. Then, port your old phone number to a third party service, such as Google Voice (here's a guide from Lifehacker on doing so). Finally, cancel the line with the old phone and port the old phone number back onto the new phone, thus keeping the new phone and the old number, and dodging the fee.


But there's a catch: It works only if you wait three months to port the number back. If you do it before then, Verizon's system treats it like you're continuing the same service, and they hit you with the $30 upgrade fee. Curses.


Then there's the squeaky-wheel approach. If your phone is error-prone, complain to Verizon and they may end up swapping it out for free with a new phone. That's one backdoor method to getting a fee-free upgrade. Your mileage may vary, and you'll need to be "lucky" enough to have a faulty device.


OK, so why not just leave Verizon? If they care so little about customer loyalty that they're going to penalize you for staying with them, why give them the satisfaction? Simply switch to a new carrier at the end of your contract and get your newer and fancier phone there. Unfortunately, unless you go with a pay-as-you go plan, you will need to pay the new service's activation fee. Wouldn't you know, it's usually about the same as the Verizon fee you're trying to avoid.


Sweet-talking the customer service rep over the phone into dropping the fee sometimes works, and some credit unions waive cellphone plan activation fees for their members. Also, wireless retailer sites such as Wirefly periodically run promotions waiving activation fees if you buy through them. But depending on how frugal you're feeling, saving $30 may not be worth the hassle of jumping ship.


There is one foolproof method I found for avoiding Verizon's new $30 upgrade fee: Buy your new phone from someone other than Verizon -- on eBay, for instance. Then you can add the phone to your account, sans upgrade fee. Because you're already a Verizon customer, there's no activation fee. Success -- that is, if you can find a phone cheaper than Verizon's discounted rate. This method works for avoiding upgrade fees at other carriers as well.


However, if you buy your phone from someone other than Verizon, be sure to check that the phone hasn't been reported as lost or stolen. A "hot" phone can't be activated, leaving you with a pricey brick. Ask the seller for the ESN, MEID or IMEI numbers, which are basically serial numbers for your phone, then check them out with Verizon. You can enter the number at this Verizon page or call Verizon and they'll do it for you.


If you buy a phone on eBay, you won't be locked into a new contract with an early termination fee either, but you also won't be able to get the discount pricing Verizon provides with signing those long-term contracts. It's a toss-up depending on what you value more, flexibility or price.

In the end, Verizon's new $30 upgrade fee is bound to become the new normal. I took an informal poll of a few friends who were on Verizon. At first they were shocked, because they hadn't heard of it, then incredulous, because the explanation was so inane. However, when I asked them if the fee was enough to make them move to a new carrier when it came time to upgrade their phone, they said no. "After all," my friend Melinda said, shrugging her shoulders, "it's only $30."


Looks like Verizon's got our number on this one.


More from SmartMoney and MSN Money:

May 10, 2012 3:25PM
Was a LOYAL Verizon customer for 10 years.  I got tired of the garbage and almost having to pay for a data pack etc.  I could not continue to WAIST that much money on 1 phone line a month.  I went to Net 10 and pay 1/4 the price I did with Verizon and I get more on my phone.  The signal is the same network.  I decided to use that money on something more useful, like to build my new house.  $1200 that I save a year on service was a nice upgrade on my kitchen cabinets!
May 10, 2012 3:24PM
Of course, you could always KEEP your old phone.  Is the difference between 3G and 4G really going to make a difference in your life?
May 10, 2012 3:23PM
I have dropped Verizon.  Switched to Cunsumer Cellular.  There I was able to pick the minutes I wanted at a lower rate that Verizon couldn't give me.  Cost me less to add a line.  I now have more minutes, plus messaging and web.  Cut my bill in half.  Not bad considering I did not have messaging and web with Verizon.  Come on people do your homework and you will find a cellphone company that will save you money and give you good service.
May 10, 2012 3:21PM
Maybe my cell phone needs to go the way of my satellite TV...I dropped them 8 years ago and haven't looked back once.
May 10, 2012 3:19PM
I'm sorry, but Melinda is stupid. It's people with her attitude that allow these companies to continually rip us off. Complain, complain, and then complain some more to make such a stink that Verizon will retract the fee. If all customers said no, and had the guts to walk away, then the company would no longer charge the fee. As customers we have the power, but people like Melinda take it away from us.
May 10, 2012 3:16PM

Caught between a rock and a hard place here:  my husband has five telephones in our plan, and two of them are grandfathered in with unlimited data/voice/text packages, which NOBODY offers anymore.  I don't dare cancel my data plan because I know I'd pay a fortune to somebody else for the same crappy service I receive (we are in a dead zone at home).


However, if they EVER remove that grandfather clause, I will either drop my cell phone plan altogether or will go down to voice only.  I will be as loyal to them as they are to me.

May 10, 2012 3:16PM
Some of us brainwashed lemmings have legitimate business needs for mobile devices.  But you knew that already since you know everything about everyone.  How is it building fires by banging rocks together these days?
May 10, 2012 3:15PM
i think it is about time the american people stick upi for what is right. These big companies rape their customers and we let them get away with it as doed the goverment. Everything today is done with a few ckicks of a keyboard and requires next to no time to do. But the big shots at these places want more payoff for themselves so they rape customers. People should tell them charge me and I get new carrier, enough is enough
May 10, 2012 3:13PM
the wife and i were with verizon and with 2 non smartphones with 800 minutes plus texts and overages it ran us $150 a month. now we went to straight talk and pay about 80 after tax. so say up yours to verizon and find a pay as u go carrier that wont bone you and your wallet
May 10, 2012 3:13PM

Oh no... looks like Verizon may have pulled a "Netflix"!

May 10, 2012 3:11PM
simple solution. keep original phone, do not up grade to fancier. keep up with the Jonese old school. BAAAAA..BAAAA
May 10, 2012 3:11PM
Some of us brainwashed lemmings find legitimate business needs for the devices, but since you know absolutely everything about everyone,  you already knew that. 
May 10, 2012 3:09PM

I switched to boost. They have crappy singals in certain locations otherwise I get the same service as I did with US Cell.  And now I save $30+ a month.

May 10, 2012 3:08PM
I spend $400.00 per month on my Verizon accounts that includes land lines, cell, internet and TV.  Lets see if the company cares if I leave or not.  It is not the $30 but the principle. There is another approach that has worked in the past and that is to ask for credit towards your next bill.
May 10, 2012 3:08PM

It is 1%'rs crap (like this) that caused the economy to go down the perverbial toilet. Greed. Plain and simple. And why not? Who's to stop them? Certainly not your elected officials (whom you pay their wages).  Hmmmmmmm.  The fog begins to clear.


May 10, 2012 3:05PM
I'm an AT&T customer and everytime I upgrade my phone they charge me $36 but if you call their customer service and ask them to waived it, they will waived it for you.  That's in my case, they always waived it. I been a AT&T customer since 1998 when they still a Pacific Bell and then become a Cingular.
May 10, 2012 2:54PM

When are we going to stop calling them phones. I use a phone. Really it's just a phone, and I don't have a problem with "upgrade" fees.  I have no sympathy for a bunch of brainwashed lemmings who feel the need to stay connected 24/7 with latest "g".

May 10, 2012 2:53PM

If you are unhappy with a broken or defective phone, simply go to a Verizon store and ask to speak with the manager. Not a local franchise, and actual Verizon company store! Very important.


Once you speak with the manager, tell them your problems, WITHOUT yelling and Cursing, and most often they will make a "managers exception" and allow you to get a new phone. This will start your contract over, but why wouldn't it.


My specific example is most recently with a Samsung Fascinate, one was a laggy brick, and the follow up went through a wall (LITTERALLY) due to similar laggy performance. The phone was shattered, and still had pieces of drywall embedded in it, and the manager took care of me. Certainly did not have to, but try to be a real person when dealing with a manager or associate, and not be an asshat. The asshats ALWAYS get the worst deals, and hear "no" a lot more often. Trust me on that one....I am a retail manager at a big box!

May 10, 2012 2:51PM

Why don't people bail on Verizon like they did Netflix, the fees Verizon charges are much worse than the 60% rate increase Netflix took. Seriously, Verizon will keep charging these high rates and rip off fees until we start leaving their company in droves. There needs to be some true competition for Verizon, then maybe they will stip ripping their customers off.


A soon to be X Verizon customer

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