Instant Cashback Mobile Phones
Instant cashback mobile phone deals offer a cash inducement for customers to take out a mobile phone contract. Retailers will pay back their customers a portion of the cost of the mobile contract in the form if "instant cash". The term instant is used to differentiate these deals from so called free line rental deals which are claimed back by redemption. With an instant cashback deal, you do not have to claim cash back at a later date, it is paid automatically. These deals are probably the most cost effective hassle free way to take out a mobile contract.
Samsung C3050 black, Unlimited calls and texts to any network.,
Tariff Name: O2 Unlimited (24m), Network o2, 24 Month Contract, 9999 Anytime Minutes, 3000 Free Text Messages, Samsung C3050 black, Free Mobile Phone, Total Savings £972, Total Cost After Discounts £348
Monthly Cost £55 Avg Monthly Cost After Discounts: £14.50
Samsung C3050 pink, Unlimited calls and texts to any network.,
Tariff Name: O2 Unlimited (24m), Network o2, 24 Month Contract, 9999 Anytime Minutes, 3000 Free Text Messages, Samsung C3050 pink, Free Mobile Phone, Total Savings £972, Total Cost After Discounts £348
Monthly Cost £55 Avg Monthly Cost After Discounts: £14.50
How Instant Cash Back Mobile Phone Deals Work
Instant cash back mobile deals are pretty straight forward. You simply select the deal you want, order your phone and the retailer will send you a cheque for an agreed amount.
This site will order deals in ordder of total cost, so you can see the actual monthly cost after cash back has been awarded. For example, if a contract costs £20 per month, you would pay a total of £240 over a 12 month contract. If the value of cashback awarded were £120, then the actual cost would be just £120.
Why Do Retailers Offer Instant Cash Back?
Retailers are operating in a highly competitive sector. In order to compete with each other they need to offer better deals. However, retailers cannot discount the monthly cost of a given tariff as charged by the mobile phone network. For example, if Orange charge £20 per month, that is fixed, the retailers have no way to discount it.
A work around is that retailers can give customers cash back directly, which the customer can then put toward / use to offset the monthly cost paid to the network provider (Orange, Vodafone, o2, Virgin etc).
What Kind of Deals Can You Get Cash Back On?
There are two situations in which retailers will offer instant cash back on mobile phone deals.
1) High Value Contracts
If you order a high value contract, then the retailer stands to gain more commission from the network provider. To make their deals more competitive, the retailer may offer to return a portion of their profit to the customer. The idea here is that by refunding monies to the customer, they can drive more sales, and, although making less per sale, make more on aggregate as they sell more contracts.
2) Clearance mobile phones
End of line or clearance mobile phones are the other kind of deal on which instant cashback or automatic cash back may be applied. In this situation you are effectively trading down your handset to an older model, and taking instant cash by way of compensation. For example, if a given deal entitles you to a handset worth £250, and you elect to go for an older model which is only worth £100, the retailer can afford to offer you £150 as instant cash back.
These are the real bargains as you can find a relatively inexpensive contract and still get cash back, lowering your costs. The handsets on offer with instant cash are still pretty good, but may lack some of the style and features of the very latest models. These deals are great for those who value a bargain more than having the latest handset. Lets face it, most people do not use all of the features of their mobile phone anyway. If you are one of these people, then why pay for features you do not need when instead you could reduce the overall cost of your contract by taking a perfectly serviceable lower spec handset instead.
These deals are great for anyone on a low budget, but also for self employed people who want to run a cheap mobile phone but may actually want a cheaper handset in case it gets lost or damaged whilst at work.
Alternatives to Instant Cash Back Deals
As well as instant cash back many mobile retailers offer free line rental deals. These deals can work out even cheaper than an instant cash back deal, however, they are a lot more complicated and you are not guaranteed to get your money back. With these deals cash must be claimed by redemption, typically in months six, nine and eleven. If you forget to make your claim on the given dates then you lose your money. Furthermore, if you lose documentation such as mobile phone bills (which are often asked for as part of the redemption process) you will also lose your money.
Free line rental deals are not as popular as they once were because of the complexity of the deals, and the fact that not everyone gets their cash back. The instant cash back deal remedies this by removing all risk from the process, but, reducing the amount of cash back that can be claimed.
Our advice would be to go for instant cash back over Free Line Rental deals unless you really know what you are doing (with regard to free line rental offers).