Can anyone explain how a mobile phone contract gives 'cashback' (and why?)

[amistillsexy]

I've always bought my hown handsets and had pay as you go/ pay monthly deals, but I could do with a smart phone, so I'm looking at deals.

Many of the deals have a monthly price, then a 'cashback' bit, which brings the 'actual' price you pay down.

Why are they giving cashback? I've found out that you need to periodically return your bills, but what do they do with them? WHy would they pay for them? Would I be, effectively, selling my friends' and colleagues' details by doing this?

Heres the link to the site that explains it (badly!)
www.affordablemobiles.co.uk/how-to-claim-gift-and-discount-line-rental.html

Not sure what they do with the details but I think they're hoping that people would intend to send the bills back and then don't, so end up paying the full price. I'm pretty sure that payout rates are smaller than you'd think due to people not getting round to claiming.

Another way to get cashback is to buy a phone online using a cashback website such as topcashback or quidco. You access the phones website by going to the cashback website first and get cashback from them.

Thanks for the quick reply. That's what I thought it would be. I suppose the 'cashback' is an incentive, and most people would intend to do it, but I should imagine that they have carefully crafted their rules and regs to make it a real chore (probably not worth the time and effort if you cost it out on an hourly rate).

I'll have a look at the immediate cash back sites.

Is this what people do, then? Is this how everyone is affording Smartphones? I've been in a real backwater, haven't I?

It is a marketting thing.

They show you the effective price after cashback. It looks like a good deal. You buy cos best on market.

You forget to send the exact bill required within the (usually) 30 day period. They keep the cashback.

Not hard to do, I have done.it thru carphone warehouse. Just read the smallprint and follow instructions to the letter

Yep, for each mobile contract they sell, they've calculated how much money they make from the network provider and then give you a portion of that back.

The bill thing is to make sure you are still signed up to the provider and also to give you a bit of hassle. The hope is that some of you will mess it up or simply forget so they keep making a profit. If 100% of customers always claimed, these schemes would soon stop.

The couple of times I've done this, I've put reminders in my calendar to stop me from forgetting.

They have made it easier over the years as well, depending on provider. I'm currently on a cashback deal contract via mobiles.co.uk (who I'd heartily recommend, actually, found them cheap and customer service helpful) which is part of carphone warehouse. The first time, 7 years ago I had a deal like this sending the bills in was a massive faff and I ended up forgetting half of them, but now just go on the website and use their form to upload a pdf of the bill - which I can get from the orange website. So all in all it takes me about 5 minutes to do, provided of course I remember to do it. They don't try to 'trap' you either, I've only had one claim turned down and that was my own fault for sending it in late.

Thank you all for your replies. You have given me the confidence to get onto a contract!

I discovered that the phone I'd set my heart on is only available from one network, so my choices were limited. Iknow I would panic over having toremember to send in bills, etc, so I've gone for a contract which gives immediate cash-back.

Thanks to all of you, I will take delivery of this little baby tomorrow! I can't WAAAIIIIITTT!!!!!