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Why Phone Stores Should Stockpile Replacements
My phone got wet. It wasn't a warranty issue, since it was my fault. (Well, it would be more accurate to say that it wasn't the manufacturer's fault. I was going through the Ballard Locks with some friends in a river raft that we were paddling. But taking my phone on the raft wasn't the stupid part; I had it sealed in a zippable plastic bag. But on the way back through the locks, some jerks in a rental yacht pulled up to the raft, started chatting, and then suddenly urged us to get on board and get our raft into the yacht very urgently, making me think it was an emergency and causing me to lose track of my phone. As I dug the soaked phone out of my pocket once we were all on board the yacht, we later determined that the "emergency" was that the jerks were trying to get the three women in bikinis on board their boat.)
So I gave the T-Mobile store rep an abbreviated version of this story the next day, and he said that after I paid the $90 deductible under the phone insurance policy, I could get a new phone mailed out to me by overnight mail. As much as the phone itself sucked, I really wanted a working one again, so since I could see the same model in boxes on the wall, I asked why I couldn't just take one of those, since the insurance policy entitled me to a replacement. He said it was because to save costs, their insurance provider sometimes sent out refurbished phones as replacements under the insurance policy, which are worth less because they can't be sold new.
Well, that's fair. Presumably it really does keep costs down to use refurbished phones as replacements, and while not every cost savings gets passed on to the consumer, it doesn't hurt. Then I asked if I could "borrow" one of the in-store models by buying it and using it until the replacement phone arrived the next day, then returning the borrowed phone to the store under their 14-day return policy? No, he said, at least not without paying the $50 re-stocking fee. (In hindsight I probably should have paid that for the ability to start using my phone again, but it's one of those fees that grates on you not because you can't afford it, but because you're disgusted at having to pay it.)
But, that's still fair. Restocking a phone costs money too. But -- but -- why don't they just keep a stockpile of phones in a cardboard box in the back -- the crummy "refurbished" ones that can't be sold new -- and use those to satisfy customers' insurance claims? Then customers who file a claim could walk out of the store with a replacement phone, the same model they'd always been used to, and the insurance company could mail the replacement phone to the store, to replace the one that was handed out to the customer.
They would only have to have one replacement model of each phone that had been sold recently enough to consumers to still be covered under a replacement insurance plan. That still probably wouldn't take up more space than what you could fit into a medium cardboard box. Perhaps more popular models of phones could have multiple stand-by replacement models in the store, since it would be more likely for two people to walk in on the same day looking for replacements for that phone model -- and once the replacement phones get mailed out by the insurance company, the store's supply of replacements gets replenished anyway. If the store is really unlucky, and four people walk in on the same day making warranty claims on a phone model, when the store's policy was to only carry three of that model in stock, there would be no reason to penalize the store, as long as they made a reasonable effort to have enough replacement phones in stock to handle the normal rate of insurance claims.
For that matter, you wouldn't even have to have the replacement phones all in stock at the same store. One store could serve as the "replacement supplier" for all of that carrier's retail stores in, say, a 20-minute driving radius. So when I make my warranty claim at the initial store, they can tell me to drive 20 minutes and pick up a new phone. That would have been much preferable to waiting another day.
Also, if the customer's replacement phone gets given to me instantly and then the replacement from the insurance provider gets mailed to the store to replenish the one they just gave out, there's no particular reason it would have to be sent out by overnight mail. That would bring down the cost of handling the claim, which might be passed on to the consumer in the form of a lower insurance deductible or lower overall fees (again with the optimism, but lowering costs means the savings will be passed on to somebody, even if only to the shareholders of the cell phone carrier). The more of that phone model they have in stock at the store, the more slowly and cheaply the replacement phone can be mailed out, since you only need to make sure that the store's supply of that model never hits zero. So the optimal solution would involve weighing the cost of storing two or three of a particular phone (versus just one) versus the cost savings of the slower mailing method.
This is a simple (and very first-world) problem and a modest fix, but the larger point is that there's no reason to think that the free market necessarily arrives at the most cost-effective solution in situations like this. Companies compete on cost-effectiveness in arenas that are highly visible to the consumer and likely to factor into their purchasing decisions -- the highest-megapixel camera for the lowest price, for example -- but few customers at purchase time are likely to ask about the insurance claim process (and probably very few people ask how quickly a phone gets replaced when a user files a claim). As such, we're lucky that the insurance provider sends out the replacement phone by overnight mail at all, when they could presumably mail it out by 3- or 4-day mail instead, and no free market forces or government truth-in-labeling enforcers would probably penalize them for that. But an in-store-replacement rule (or a replacement-from-some-store-within-a-20-minute-drive rule) would benefit customers more and, with the savings on the mailing speed for the replacements, possibly cost the carrier less. (Even if it did cost the carrier more to carry a small box of in-store replacements in the back room, and even if that cost did get passed on to customers, I'd consider myself ahead on the deal if it meant I'd never be without a replacement phone for more than a day.)
... legislate away my every inconvenience.
You're in favor of the federal government enacting legislation that would determine how a company runs? We need less government oversight, not more... especially for something as ridiculous as this. If you can't be without your phone overnight, you have some issues. If it's that important.. YOU keep a spare on hand using YOUR money.
This article is foolish. I could write the same diatribe for any object under warranty.
Car dealerships should be required to keep an inventory for every model on-hand in case my car needs to go in for warranty service for an extended period.
Home Depot should be required to keep a loaner inventory for every power tool in case I need to ship mine away for warranty service
Best Buy should be required to keep a a loaner inventory for every refrigerator model...
etc etc...
You should count yourself lucky that most cell shops offer you a free loaner phone AT ALL, because they are under no obligation to, and some do not without a fee.
Read on for the rest of Bennett's thoughts
This is pretty much always bad advice.
What's wrong with you people? Can't you take care of your own fucking problems without crying to dad..., er, I mean, government for help???
Get something through your thick skulls: regulation is ALWAYS bad!! But you'll only get once some regulation affects you in a negative way.
It troubles me that you were without your phone for a few days. Really... well... NOT. What kind of tripe is this on Slashdot? This is perhaps one of the most whinging pathetic things I've heard in a while. It reminds me of a two-year-old crying over spilt milk.
I'm pretty sure Apple stores have replacement stock on hand. Anytime I've had to get my phone replaced under AppleCare+, I've been able to make my appointment, walk in, and walk out with a (presumably refurbed) new phone from a box in the back. Heck, if the replacement didn't work in the store, they had even more replacements ready to go.
This is probably the result of Apple being able to afford to keep that kind of inventory on hand in their stores. Plus, Apple doesn't exactly have a lot of models of phones. A carrier like T-Mobile or Verizon would have to keep a frankly excessive number of phones on hand for any immediate warranty replacements. (How many Samsung phones are on the market at any given time?)
On the gripping hand, it's not like smartphones are exactly *large* and would take up a lot of space in the backroom so...
I think it'd be a nice customer service perk (and part of the reason I stick with Apple) but not something that needs to be legislated. Do carriers not keep cheap loaners in stock that you can borrow (with a credit card deposit) until your actual replacement shows up?
This is like the worst article I have seen on /. in a while.
Troll is not a replacement for I disagree.
Why, slashdot, why, do you let this guy post this nonsense? It almost makes me miss John Katz.
Ok, time for an off-topic side story. Feel free to mod me off-topic, but I can't resist.
My kids (6 years old) came home with a book list of books they were supposed to get from the library and read. One of them was about some Dogs from some farm. So my wife comes home with the book from the library. As I start reading it, I notice the author's name: John Katz. That can't be the same John Katz can it? Turns out, yes. John Katz, after moving on from posting drivel on slashdot, is now writing children's books. And my school district was making my children read them. There's no escape!
So I'm pretty sure, once slashdot finally gets the message that nobody here cares a lick about what Bennett Hassleton thinks, he'll turn up somewhere else equally miserable.
Really, overnight is fine for most people. However, for the price of an additional phone and some surcharge, I am sure your phone shop will be willing to stockpile one phone just for you. Requiring them to have all insured phones in stock would just drive up insurance prices, even for people that do not need this.
Most ACs are not even worth the keystrokes to insult them. Be generically insulted by this and ignored otherwise.
I don't even read this guy's posts anymore. I come here for the (mostly deserved) snide comments.
Again, someone remind me why this guy keeps popping on ./
this is purely a question of economics and $. the answer is very straightforward for those familiar with either financial accounting or microeconomics, and comes down to a concept called 'working capital management'.
To house that inventory (inventory being an element of working capital, along with accounts receivable and payables etc) of phones costs money, and do so means that you have to take into account the cost of that money. If you need to borrow it, then you have to pay interest on the balance. If you have the extra cash, then you need to take into account the opportunity cost of using your cash for inventory instead of, say, marketing or hiring another salesperson.
to use a numbers example, lets say you are the store owner, and you determine you need 50 phones on hand at any given time. you need to pay $50 upfront to house each phone, or cough up 50 x 50 = $2500 upfront. When a customer comes in for a replacement, you give them one out of your inventory, and then need to order a replacement to top-you-off back to a standing inventory of 50 phones. The give-out/re-topping off is a net money neutral transaction (at least theoretically), but as you will always have to top off your inventory, you will never see your $2500 again unless you liquidate, which as long as you're a going concern, you won't do. Add onto that the fact that holding that inventory exposes you to obscolesence risks, and so your inventory, even in a liquidation scenario, might only be worth, say $1000 to you. So you have capital risk in addition to the costs of funding the inventory. Now multiply that $2500 by the however many thousands of retail shops you care to (and/or increase the number of phones needed in inventory) and you start talking real money.
Now if the manufacturer wants to finance the whole shebang instead of the retail store owner, then great. but SOMEONE has to finance it. and it's much easier (and cheaper) to make the customer wait and only order them as-needed.
How about legislation to make it illegal for companies to sell insurance on phone for $10-$12 a month and then charge a $90 deductible on a phone that is now several months old and could be bought on the internet for $50?
If you are not allowed to question your government then the government has answered your question.
... is that he could have got a replacement immediately, subject to a $50 restocking fee, which he agrees is reasonable.
But what he wants is regulation which allows him to do the same thing, more or less, but not subject to the restocking fee. So he wants RETAILERS to take some responsibility of INSURERS, but without being paid to do it.
Why was this even posted? Who gives a shit about this guy's shit? This is the kind of crap you want to see (or ideally don't even want to see) on Facebook. Maybe his friends care. But on Slashdot? Really?
He can't do that, he would lose money. Which is why nobody does it.
The first thing I though of was that there is no way for one particular store to know that you are that person's store and therefore have to stock the phone that they have insured. So you will have to have at least one of every phone in existence that is currently under an insurance plan. Secondly, you have no way of knowing how many people are going to experience an insurance issue on a given day and come in to get a replacement phone. There are actuarials which could give averages, but the store would need to cover for the worst case, not the average.
Far cheaper for the consumer would be, instead of paying the monthly insurance and ridiculous deductible, just buy a second phone and leave it in the box.
If you are not allowed to question your government then the government has answered your question.
You can't legislate good customer service. Besides, the inventory overhead would be unreasonable.
But, this is T-Mobile he's talking about. They use SIM cards. The store could just program a SIM card, slip it in a random unit someone traded in last month, and let him walk out of the store at least being able to make phone calls. Heck, they might not even care about getting the loaner unit back, depending on its resale value. It's the sort of courtesy that encourages repeat patronage.
This is clearly an opinion piece. A quick scan makes it look even more anecdotal and presumptuous than I had expected. It's not April 1st, and this is terrible.
"There are some people that if they don't know, you can't tell them." ~ Louis Armstrong
And I mean the crowd, not the admins.
For voicing all the thoughts that immediately jumped into my mind as soon as I saw this on the front page.
Bleh.
Because everything needs an automotive analogy.... "Car dealers should keep one of every part in stock for every car that's currently under warranty"
This would be completely unrealistic for a car dealership to do, so instead they stock only the parts used most frequently, and then just rely on the manufacturer to have an appropriate stock at regional/national warehouses. It's been this way for years, and yes it's an inconvenience for the day or two (or ten) that it takes the parts to come in, but it is what it is.
Perhaps the better plan, again taking a lesson from dealerships, would be to have "loaner" phones on hand to let you borrow while you wait for a "new" phone to come in. Of course, dealers seem to never have enough loaner cars, and I'm sure the phones would be the same thing - they'd also need to address the concern of getting the phones back (perhaps have warranty phones shipped to local store, and only given out upon receipt of the loaner?).
You're in favor of the federal government enacting legislation that would determine how a company runs? We need less government oversight, not more... especially for something as ridiculous as this. If you can't be without your phone overnight, you have some issues. If it's that important.. YOU keep a spare on hand using YOUR money.
It's as simple as getting a $20 Jenny basic phone from Amazon, and possibly a $5 SIM adapter so your micro/nano sim can fit. I think it's a great insurance policy, and you can take the basic phone with you overseas to use with random sims (of course, with T-Mobile, you can still use your phone data-free,sms-free, and calls without usurious charges overseas too, but having a backup there is useful too).
Make sure everyone's vote counts: Verified Voting
Also, where did he get the idea that a ziploc bag is watertight? That's just stupid.
An enigma, wrapped in a riddle, shrouded in bacon and cheese
First and foremost... a bunch of strangers on a yacht are yelling at you to get on board for no explicable reason and you just do it??? Your ass just got kidnapped!
Second: Your story is unclear... are you suggesting that there were three women in bikinis on your river raft? If you speak the way you write I find that claim dubious.
Third: Some guys in a rental yacht start yelling something about getting aboard their boat and your situational awareness tells you it's an emergency and you should get in the water???? IN A LOCK OF ALL PLACES??? Depending on the direction the lock was operating, you could have been pulled under and drown. Your fucking lucky to be alive! Remind me to never let you captain anything that floats ever!
Fourth: Suggesting that every cell phone store keep an equivalent unit on hand would have a cumulative cost in the millions, and 90% of those devices would be wasted... they would sit on the shelf until such time as the user (rarely) needs a replacement, or until the user decides to upgrade... at which point the store now has an obsolete phone on the shelf that can't be sold for profit, and is now required to buy a brand new phone to stick on the shelf to act as "back up" for the new phone just purchased. Your logic is incomprehensible. It is apparent that you have no business sense whatsoever and that you make a living only because you are surrounded by exceedingly tolerant and generous people.
Which has more power: the hammer, or the anvil?
Could we please get a tag to filter out this narcissistic drivel from the ever-obnoxious Bennet?
1. There are far more than 4 cellular companies in the Phoenix area 2. There are hundreds of independent stores in the Phoenix area 3. It would take at least 100 locations just within the Phoenix area to put the entire population within 20 minutes of a location Verizon currently shows 34 different smartphones available for sale, most of those come in multiple colors and memory sizes. They also have 8 basic phones. Total variations, not including color, is over 50 I would wager that across providers and phones sold in the past 3 years you could come up with at least 400 phone models. You would also need to stock more than 1 of each model. Sounds like a major mess when a simple solution already exists: 1) Don't buy insurance 2) Replace your phone if you break or lose your current phone
Here is a list of additional, serious problems legislators should address ASAP:
http://first-world-problems.co...
Like everybody else says, this article is stupid. BUT THERE'S MORE!
T-Mobile sells a number of Android phones for less than the deductible of $90. $50 Alcatels, for instance, or the Nokia Windowphone. The LG L90 is a half-decent phone, better than the LG F3 he broke, for $100. Or he could even use the money to get a better phone. People use their cell phones a lot, presumably Bennett Hasselton is gainfully employed, it would have been worth the $1/day.
Why would a person who is pinching pennies by getting a crappy phone also spend money on a high-deductible insurance policy, on a phone that probably cost him $200 new in the first place?
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