Automatic Cashback Mobile Phones

For those not familliar with incentivised mobile offers the term automatic cash back may seem a little peculiar or confusing. For example, you may wonder, why would a mobile phone company give automatic cashback, and what exactly do they mean by automatic?

First of all it is fundamental to realise that when you get a cellular phone contract, it is not with a single company, you are effectively dealing with two (unless you go direct to the network operator). Usually you will buy your cellular phone from a shop, be it or on the web. Then you will be obliged to pay a monthly line rental fee to the network provider. The relationship between the store and the network provider is solely commision based. That means the network provider pays sales commission to the retailer.

The retail store has no control over the price charged by the network provider, they are fixed. To promote more contracts the store will typically spend some of the commission on incentives for the customer. Ten years ago it was enough for them to merely give away a free handset. This was a time when mobile phones were really expensive and were a a status symbol of sorts.

Nowadays though, things are different. Cellphones are far more common and are much cheaper, so, mobile stores are forced to ply their customers with increasingly attractive incentives, for example free laptops or even free televisions.

Of course some consumers are not looking for free gifts, all they want is the cheapest cell phone promotion available, and this is where automatic cash-back is used. As the shop cannot lower the monthly cost of a mobile rental, they instead offer to give some money to the customer on the spot. So, for example, if the consumer tries to negotiate a Thirty Percent discount in montyly line rental, the cellphone shop will simply calculate the value of thediscount and give them their cash there and then.

The reason these deals are known as automatic cashback is that the earlier permutations of these offers operated a process of cashback by redemption, whereby consumers had to claim money back at the end of the contract. Because of dubious terms and conditions attached to these claims for cashback many customers did not received their money, and therefore lost faith in the cashback by redemption deals.

So, the automatic cashback offer was conceived. These deals promised more modest savings than the cash-back by redemption offers, but, the refund was guaranteed. It was automatic, paid to the customer as soon as the contract was signed, and thus, the term automatic cashback was coined for this kind of mobile promotion.

For consumers wanting an automatic cashback cellular phone promotion, without question, the easiest place to get one is online. Whilst it may be possible to find one of these offers on the high street it is far less likely. For a start, the high street cellular telephone retailers cannot generally offer such good offers or incentives purely because their overheads are more than those of the online competition (though their customer service is normally superior). Furthermore, it is difficult for shops to make money with these offers. The profit margins with automatic cash-back offers are so tight that they require constant attention, factoring in changes in the levels of commission paid and the cost of the phones themselves. This means that the shelf life of a certain promotion is quite short, once that ends you (as a customer) have to wait for the next automatic cashback offer to come along.

For this reason cell phone comparison sites are usually the best way to find an automatic cash-back offer , as they will show all offers by all online stores on one page. These deals are obscure, representing a tiny amount of the total number of deals on offer, and, you will have to accept an older less well featured handset in order to obtain one. But for the thrifty, automatic cashback deals are by far the cheapest way to run a phone.