Pitfalls with 12 Months Free Line Rental Deals
As discussed in the previous section, so called 12 months free deals are actually cash back by redemption deals.
What is a cash back by redemption deal?
With a cash back by redemption deal you are given the opportunity to claim money back (by redemption) at a later point in the contract.
Typically you will be required to send your mobile phone bills and other documentation to the retailer in order to receive your cash back.
Usually the retailer will set specific dates on which this cash must be claimed.
There are a few important points to remember with these deals:
- The cash back is not automatically paid to you
- If you fail to claim your cash back you will lose your money
- The agreement is between you and the retailer, not the network provider (to whom you pay your bill)
So what is the catch?
There are a few things the retailers do to reduce the likelihood of you making a successful claim.
The one that catches most people out is the stipulation of time frames in which you must make your claim.These usually start quite late in the contract, from six to nine months after the date you sign the initial contract.
By setting these dates at a point long after the deal is signed, the retailers hope you will forget to claim your money. Once you miss the deadline for claiming, the retailer will not have to pay you your money back.Furthermore, most retailers actually make the payments over four separate periods, thus increasing the likelihood of you missing one or more cash back payment.
Some retailers actually state that if you fail to claim any one of these cash payments, you forfeit all subsequent claims also.
Upon purchase, some retailers give you vouchers or coupons which you must use to redeem your cash back. Retailers know that some people will lose / misplace these. If you do (lose them), they will not be replaced and you will lose your cash back.
Many retailers also state you must send your monthly bills in order to claim cash back, knowing that some people will lose / forget to keep one or more of these bills.
Are there any other risks / pitfalls?
Yes, retailers continually alter these deals, so read the small print very carefully.
Make sure you order sufficient inclusive minutes / texts with your deal, otherwise you will have to pay for the excess, though, these will only be charged at the normal network rate.
There is one more specific risk you need to be aware of, and that is, if the retailer go's out of business you will lose your money.
Remember, the deal is with the company that sold you the phone, not the network provider to whom you pay your bill.
If that company go's out of business, the network provider will not help you, you will lose your money.
Do many retailers go out of business?
No, most retailers are fine, but, it does happen.
This is the sole reason no retailers are recommended on this site!