If you have not used a Free Line Rental deal before we strongly advise you to read the following post to familiarise yourself prior to ordering. These deals can be complicated, and can actually leave you worse off if you do not fully understand what you are getting into.
Free Line Rental deals were hugely popular around 2005 when they first appeared on the market. Today they are far less popular as the pitfalls associated with them are more widely understood by both retailers and customers. In the past some retailers went out of business after mis-calculating the true cost of these deals, whilst others left a trail of disgruntled customers in their wake. These deals are complex and difficult to get right.
All that said, there is still a high demand for them as, when used properly they are by far the cheapest way to get a contract phone.
Nokia 1616, 100 minutes to any network and unlimited texts.
Tariff Name: 100 mins Unltd texts (18m), Network T-Mobile, 18 Month Contract, 100 Anytime Minutes, 3000 Free Text Messages, Nokia 1616, Free Mobile Phone, Total Savings £395, Total Cost After Discounts £-27
What is a Free Line Rental Deal?
In a free line rental deal the retailer will refund the cost of your contract usually via cheque. So, you still have to pay your monthly bills to your network provider as normal, but after a given period you can “claim” this money back from the retailer who sold you the contract.
For example, let us say you ordered a phone via BuyMobilePhones (a popular online retailer) on a monthly contract with Orange. You would be billed as normal each month by orange and would have to pay this bill yourself. After a given amount of time you would have the option to “claim” these payments back from BuyMobilePhones.
The type of cashback offered in these deals is known as “cashback by redemption”, that is to say you must “redeem” the money. It is not guaranteed that you will be paid. You have to complete a sometimes complex process before you get your money back.
The other important thing to note is that free line rental deals are a form of promotion used by the retailer and have nothing to do with the network provider to whom you actually pay line rental.
The Positives
Free Line Rental deals are by far and away the cheapest way to get a contract phone if you are successful in claiming back your money.
The Negatives
Free Line Rental deals rely on a given number of customers failing to complete the redemption process. If 100% of customers were able to claim back 100% of their costs from the retailer, the retailer would not be in business for very long!
This is where the “redemption” process comes in. In order to get your cash back you will typically have to :
- Make multiple claims each for a portion of the money
- Make claims on specified dates which are well into your contract period (6, 9 and 12 months for example)
- Produce documentation like phone bills
(the above are examples only, each contract differs)
If you fail to meet any of the criteria, for example you are late maing a claim or have lost a phone bill then you will forfeit that payment, and in some cases all subsequent payments (depending on the specific deal).
Getting it Right
We would suggest that, if you are tempted by one of these deals creating a file to:
- Record all dates on which you have to make claims
- Store all required documentation
And for good measure add dates in your diary, phone etc to remind you a week before you need to take action!
In order to be successful in your claim you are going to need to:
- Correctly interprate the small print
- Be organised
If all this sounds too much we would suggest you compromise on price and go for an instant or automatic cashback deal instead. These deals are a little more expensive but payments are guaranteed so there is no risk involved with them.