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:

 

VIDEO ON MSN MONEY

173Comments
May 10, 2012 2:01AM
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12 years I've been with verizon...every upgrade i get less and less.  They do not recognize loyalty and certainly do not reward it.  
May 9, 2012 12:54PM
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Here's a thought. Putting $20 a paycheck (assuming biweekly) from the first day of your new two year contract until the end of the contract will give you $1040. (That's twenty dollars!! Not even lunch money.) Set up an online bank like ING Direct or something that will take this $20 out of every check automatically so you never have to worry about it.

 

Once the contract is over, you have saved enough money to buy a replacement phone WITHOUT ever getting into another contract. (Whether it's an iPhone or Android phone.) Plus you may have a little spending cash that was earning interest. Now, you will NEVER have to worry about contracts again. (Ever!) Verizon piss you off? You can cancel your plan right then and there.

May 9, 2012 9:10PM
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Verizon is a a bunch of scum bags. As are all wireless dealers. They screw subscribers whenever possible. This is just the latest. Can't wait to drop them.
May 9, 2012 9:36PM
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I'm a current, soon to be former Verizon customer. I was trying to get a phone upgrade at their online store, but for some strange reason the trnsaction could not be completed, so I was asked to use the customer service line. When I contacted them, I was told that they could complete the transaction but the phone that would have been free online would now cost me $160.00. Needless to say I told them where to put their phone, and started my hunt for a new service. I'm seriously considering Virgin wireless, They use the Sprint network, so coverage is not a problem, and I can get 1200 minutes with unlimited data, for $45.00 per month with no contract, all I have to do is buy the phone. Verizon can kiss my ****-ets goodby.
May 10, 2012 4:55PM
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Isn't $180  MONTH FOR TWO PHONES ENOUGH MAYBE ITS TIME TO GO BACK TO THE HOME PHONE SCREW THE MOBILE PHONES WE USED TO GET ALONG FINE WITHOUT THEM.
May 10, 2012 8:13AM
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Thirty Dollars? HERE'S the big deal. Thirty dollars is a third of a tank of gas; a fourth of a weekly grocery bill; an eighth of the average electric bill, and. . .some people upgrade every year. . .even more!

Most wireless customers will attempt to work out their own technical questions and problems. Verizon knows this, and they're "penalizing" their customers for "customer service"  that will -- most likely -- never be used.

Money in the bank!  Pretty sneaky!

May 9, 2012 2:33PM
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Best way to avoid the fee.....don't get a new phone every two yrs
May 9, 2012 9:31PM
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Here's an idea-just keep the damn phone you already have and quit trading up for the newest toy. Money saved,don't have to learn new harder to navigate features,and verizon can suck it! Win!
May 9, 2012 6:11PM
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Went into Verizon store to purchase new I-phone when I learned I would be paying for the privilege of signing a 2 year contract with them and not getting credits on future phone. Called customer service from the store and talked to 2 different snarky customer service reps. One of them told me Verizon was "late coming to the party on this..."(like I give a crap)! I couldn't believe she said that to me so I said are you REALLY in customer service?  Suddenly they assured me someone would call me back within 24 hours. It has been 48 hours and I have realized how little a valued customer really means to them so I am taking action. (You should consider this.) If enough of us take a stand they may get the message. I am Purchasing an unlocked 4S from Apple, getting pre-paid data voice $49 bucks per month unlimited fro Straight Talk. I save enough to pay off the phone (due to non contract...was $150) in less than 7 months. In two years I could purchase a second one, like the newer model. Was worried about applications working but talked to Straight Talk and they use ATT&T towers and research says it will work.   
May 11, 2012 10:18AM
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I'm thinking that cell phone companys have WAY too much power these days. They seem to have the oil company mentality that people can't live without it so they can do whatever they want. It's the old "frog in the water syndrome". We got so attached to the cell phone and cell phone companys turned them into more than just a phone that now we think we can't live without them. At what point was a phone so important that you must use them 24/7 while driving, sitting in a room full of people and during important meetings. Don't get me wrong, I enjoy the instant gratification of texting and the comfort of knowing that if I break down in my car I can call for help. But seriously, I have a camera that takes great pictures, I can check my e-mail at home and haven't found an "app for that" that I couldn't live without. As long as we continue to act like small children who want immediate gratification and every new toy we see, we will continue to be raped by the greedy companys who hold the carrot out to us. Enough is enough.

May 10, 2012 12:23PM
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Just another corporation that's got us by the proverbial balls. My plan for dealing with this new fee? Screaming at the person that sets me up with my new plan. Why try sweet-talking the customer service person into giving it to me for free when berating their company sounds like much more fun??

 

Maybe if enough of us do this, the Verizon employees will get tired of getting bitched at, and they'll pressure the company from within to cancel the fee.

 

I already bend over and take it in the shorts with my monthly bill, now you want to screw me out of $30 more dollars for signing a contract to stay with you for 2 more years??

May 10, 2012 12:17PM
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the devil works for cable television companies AND cell phone companies?!?!?!

 

no large company cares about you, in fact, they may despise their customers. 

 

 

May 10, 2012 12:29PM
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30.00 might get a shrug of the shoulders to people making good money.. but for people making only minimum wage they have to work 4 hours to pay for that.. thats crazy.. yes i just read MSN's article about of minimum wage has changed lol i am so tired of companies and treir greed.. u go to the grocery store and get less in a package but pay more for it.. we all need to revolt!Baring teeth
May 10, 2012 12:54PM
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so wait, even though my phone bill is already an outrageous 250 bucks a month, I have to PAY verizon to get stuck in another contract?  Claiming this so called 'fee' is just for have workshops and the such...so in essence I have to pay for other peoples stupidity?  wow.
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kitolynn said it best!!!  "12 years I've been with verizon...every upgrade i get less and less.  They do not recognize loyalty and certainly do not reward it."  I've been a verizon customer for about the same amount of time and I plan to use these words verbatim the next time I need to upgrade! Thanks kitolynn for the post that is short and right to the point!
May 10, 2012 1:13PM
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i brought, into a Verizon store, a phone i bought for my step son... it would turn off on its own (a glitch i am sure). The girl behind the counter slid it open a few times to check it out and it literally fell into two pieces in her hands! she called her Support on the phone.. CORPORATE SUPPORT said they wouldn't do anything to cover the phones damage. I JUST signed a 2 year contract and am totally miserable with the whole dealings with them.   I am so close to shutting off their service and going back to a land line. This headache just doesn't feel worth the trouble. To me, Verizon WAS the lesser of "two" evils, i looked into other plans from other companies and they are all crooks! Big oil doesn't seem so bad when you put them side by side with phone cell phone companies.
May 10, 2012 2:19PM
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When in the hell are people going to pull their head out of their dark holes and stop screaming at the sales people and common workers and go directly after the corporate executives that make the decisions as to how much they want to screw people for. You have to be an idiot to  that think you absolutely have to have a cell phone. I haven't used a cell phone in over ten years and then it was only to find out what aisle my wife was in at the store. Hit the executives in their pocket book and destroy their capital and then things will change!
May 10, 2012 9:39AM
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Remember when Verizon began requiring data plans on their phones?

The reason, of course, was to 'protect customers' from accidental data usage.

I have to give their marketing spinners a salute for their continually inventive ways of saying "bend over and we'll find something to shove up there"

Seriously, if what you mean is "we're going to use our market share to force more profit out of you peons, because we know you're all addicted to your phone now" then go ahead and say it. Taking a turd and spray painting it gold before serving it up just tends to p!ss me off more-

May 10, 2012 8:50AM
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Time for me to consider other phone carriers methinks...
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