Why an upgrade fee?

[ckd1283]

One of the lines on my contract was upgraded yesterday and was charged a $30 "upgrade fee."  I called this morning to question this and was told that it is a fee that has been assessed for "the last year or so" and is not dependent on your upgrade date and is different than an activation fee.  I upgraded my own line in October 2012 and, you guessed it, was not charged an "upgrade fee."  If I have fulfilled the terms of my two-year contract and my line is due for an upgrade, why does Verizon charge a fee for that?  If this is how they reward loyal customers, what is the benefit of signing a new contract with them every two years??

[rcschnoor]

I believe Verizon has been charging the upgrade fee since around April, 2012. IF you did not get charged an upgrade fee in October, 2012 it was a mistake and you made out to the tune of $30. Congrats. You have not been so lucky this time.

What I would think more likely, is you purchase that phone in October, 2012 at a 3rd party retailer. These 3rd party retailers do not assess the upgrade fees at the point of sale for purchased phones. In this case, the $30 upgrade fee is THEN added to your next Verizon bill.

As to WHY Verizon charges the upgrade fee, I would suppose it is because that is the price they have decided to charge. They have decided they need to charge more for discounted phones(or in essence give a smaller discount from the retail price), but because of competition in the marketplace they are unable to increase the price of the actual devices. They have decided to go the same route as that of the other carriers and add the fee instead of raising the listed prices on the discounted phones. Deceptive, possibly, but it has the same effect.

What is the benefit of signing a new contract with them every two years???? Obviously, it is the same benefit you have received in the past, although it is now SLIGHTLY smaller. To give an example, I will use a 16 GB iPhone 5s. The retail price on that phone is $649.99. By signing a contract, you are purchasing that phone for $199.99 with a $30 upgrade fee for a total purchase price of $229.99 INSTEAD of the retail price of $649.99. Yes, you are ONLY getting a discount of $420(65% discount) instead of $450(69% discount). If that is not an attractive enough benefit, then possibly you can receive a better benefit from another carrier. Hopefully you will find one which better suits your needs.

[dimap52]

It's really just Market Economics. Charge what the market will bear with sustainable impact on churn. Verizon didn't charge an upgrade fee when competitors did because they saw it as a competitive advantage to attract customers. Now that they are number one,  that advantage is now less valuable to them than is picking up money left on the table, so they decided to go after it despite all these upgrade fee threads popping up on here like weeds, the incessant whining and threats to leave, which Verizon believes will be unfulfilled for the most part, thereby securing this additional profit with no value in return.

It's often said by objectors that "other companies do it is no excuse". Sure it is. Best excuse there is, if your customer base is considered captive.  Sure it's sleazy, underhanded and deceptive. But when has corporate Capitalism been anything else in pursuit of high margins and returns to investors at the paying customer's  expense? 

[Fatherof3]

I do know the $30 is a one time (per phone, per renewal, per line) upgrade fee. However, it states that the fee is to upgrade your device and "extend" your contract. Well, My contract has ended. For several months I have been month to month. If I decide to go in to get a new phone and sign a NEW 2 year agreement, I will still be charged an upgrade fee. If they really want to keep our service, why do they charge us to sign a new contract when we can just as easily now go to a different company. Which, reading a lot of the blogs and comments, as well as the service I get, seems to be a better option.

[rcschnoor]

If going to another provider is a better option, why wouldn't you switch even if Verizon DID NOT charge the upgrade fee???

[Fatherof3]

Unfortunatly, I still have a child with a phone under contract until spring. He lost a phone, was eligible for an upgrade, but we had to pay the fee to get Him a phone. Wish I was thinking then, that is why I got so frustrated about the upgrade fee. This was several months ago, so I am biding my time and shopping around. My area is actually covered by AT&T, and our calls keep getting picked up by them and disconnecting the calls anyway. Thank you for your concern though, It is not that I just haven't, I am still bound by a phone.

[Fatherof3]

I will also mention, we are not with them by choice really. We were with Alltel, then Verizon took them over, and our contract, we just kept paying our bill.

[vzw_customer_support]

ckd1283, We appreciate your loyalty to Verizon Wireless. Our upgrade fee is charged only for our devices that are discounted at 2-year pricing. If you want to take this option, we can review your account to ensure you are on the best pricing for your needs. Additionally, we have a trade-in program http://bit.ly/GGnDDC that can offset the cost of the $30 fee. Also, as a loyal Verizon Customer, you may receive special offers on our phones and pricing.

TamaraH_VZW
Follow us on Twitter @VZWSupport

[vzw_customer_support]

Fatherof3, I'm here to ease your frustrations. We just want to give you the best wireless experience possible. The upgrade fee helps us continue to provide online help tools, in store workshops, and device technical support for the life of your device. Additionally, it also helps us maintain our online website which saves your contacts, media, and pictures. We hope that you reconsider your decision to switch to another provider and allow us to continue our wireless relationship.

LasinaH_VZW
Follow us on Twitter @VZWSupport