For anybody unfamiliar with incentivised cellular phone offers the phrase automatic cashback may seem a little peculiar or confusing. I mean, why would a cellular telephone company give automatic cashback, and what exactly do they mean by automatic?
First of all it is important to realize that when you get a mobile phone contract, it is not with a single company, you are in effect dealing with two (unless you go direct to the network provider). Usually you will buy your cell phone from a retailer, either or on the web. Then you will have to pay a monthlly bill to the mobile phone network. The relationship between the shop and the network provider is purely commission based. That means that the mobile network provider pays sales commission to the store.
The store has absolutely no way to influence the monthly fees billed by the network provider, they are fixed. In order to promote more contracts the store will typically spend some of their commission on incentivised deals for the consumer. A few years back it was enough for retailers to merely give away a free phone. This was at a time when cellular telephones were probibitively expensive and were seen a kind of status symbol.
Now though, things work differently. Mobile phones are far more common and are much cheaper, so, retailers have to attract their customers with more attractive incentives, for example free laptops or even free televisions.
{Naturally} many customers are not looking for additional free gifts, all they want is the lowest priced cellular phone promotion available, and this is where automatic cashback comes into play. As the shop is unable to cut the monthly rental of a cellular telephone rental, they instead offer to return some money to the customer up front. So, for instance, if the consumer tries to obtain a 20% discount in montyly line rental, the mobile store will calculate the value of thatdiscount and refund the money there and then.
The reason these deals are described as automatic cash back is that the older permutations of these deals operated a process of cash back by redemption, whereby customers had to claim money back at the end of the contract. Due to dubious terms and conditions attached to these claims for cash-back many customers failed to receive their cashback, and therefore lost faith in the cash back by redemption offers.
So, the automatic cashback promotion was introduced. These offers offered more modest savings than the cash-back by redemption offers, but, the payment was guaranteed. It was automatic, paid to the customer as soon as the promotion was completed, and thus, the term automatic cashback was used to describe this kind of mobile phone contract.
For consumers looking for an automatic cashback cellphone promotion, without question, the easiest place to find one is online. Whilst it may be possible to find one of these deals on the high street it is unlikely. For one thing, the high street mobile stores cannot generally offer such good deals or promotions purely because their overheads are greater than those of their online competition (though their consumer service is normally better). Besides, it is challenging for retailers to make money with these deals. The profit margins associated with automatic cash back offers are so tight that they require constant tweaking, taking into account changes to the levels of commission paid and the cost of handsets. This often means the life of a certain deal is quite short, once that ends you (as a consumer) have to wait for the next automatic cash-back promotion to come along.
For this reason mobile phone comparison sites are usually the best way to find an automatic cashback offer , as they will show all offers by all online retailers on one page. These deals are obscure, representing a tiny amount of the total number of offers on offer, and, you will have to accept an older less well featured handset in order to obtain one. But for the thrifty, automatic cash-back offers are by far the cheapest way to run a cellphone.