Why Phone Stores Should Stockpile Replacements 253
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.)
Quick (Score:5, Insightful)
Legislation? (Score:3, Insightful)
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.
Agree 100% (Score:5, Insightful)
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.
Bad Advice (Score:5, Insightful)
Read on for the rest of Bennett's thoughts
This is pretty much always bad advice.
Regulation, regulation, regulation (Score:3, Insightful)
Get something through your thick skulls: regulation is ALWAYS bad!! But you'll only get once some regulation affects you in a negative way.
Very sorry to hear this (Score:5, Insightful)
If it is that urgent, get a second one yourself (Score:4, Insightful)
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.
I'll be honest (Score:5, Insightful)
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 ./
Re:Quick (Score:5, Insightful)
To keep this vaguely on topic, the answer is efficiency. If that's not good enough for you, fuck off and run a retail store until you have a clue.
Re:Quick (Score:4, Insightful)
I agree.
It it so dumb that people think about only the cost to them and ask for regulations from the government to make life easier. They choose to ship replacement overnight because that is more cost effective then keeping a pile of refurbished phones in stock in every store.
How dose a stupid article like this make front page?
What's REALLY dumb about this (Score:3, Insightful)
... 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?
Re:Apple Stores and Stock on Hand (Score:5, Insightful)
This is the precise way it should be handled, by the market. Apple will replace your phone on the spot, so that's one reason you stay with Apple. For them, it's a competitive advantage that is apparently worth the extra cost.
Bennett wanted his phone replaced on the spot, but neither selected a vendor for that purpose nor was willing to spend $50 extra because he was apparently too stupid to leave the phone in its waterproof bag until he was on land. This is precisely what government regulation isn't for.
Re:I'll be honest (Score:5, Insightful)
someone remind me why this guy keeps popping on ./
He probably pays Dice for the privilege. Or else Slashdot just posts him because he's click-bait, baby. And the more you hate him, the more more you click, and the more Slashdot loves him!
Not journalism (Score:4, Insightful)
Re:Regulation, regulation, regulation (Score:2, Insightful)
Regulation isn't always bad by any means. Ensuring food and drink isn't poisonous, preventing companies screwing their customers via false advertising, and preventing collusion in a market with few competitors are all examples of the good that can come from regulation.
This idea is shit though, you're right there.
So many things wrong here... (Score:5, Insightful)
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.