Mobile operator LG used phone compensation program disrupted due to discontinuation of’new product’
Returned after 24 months, and support for other companies’ products is strong… LG “soon to be announced”
While LG Electronics has decided to end the smartphone business, various scenarios have been raised regarding the operation method of the’Used Phone Compensation Sales Program’. LG Electronics is in a position that it will be “announced soon”, but the industry expects to exchange or pay points for products from other companies.
According to the industry on the 6th, LG Electronics is in discussions with three mobile communication companies regarding the operation of a used phone compensation sales program.
The second-hand phone reward program is a method of exempting the remaining installment payments if you purchase a new premium smartphone, use it for a certain period, and return it, and change the device to the latest model of the same manufacturer.
As a kind of insurance product, those who like the latest devices of a specific brand can lower the cost burden. In addition, manufacturers and mobile operators get a’lock-in effect’ that binds consumers. Accordingly, manufacturers are conducting compensation programs through cooperation with mobile carriers and used phone companies.
The problem is that the new LG smartphone will no longer be released. LG Electronics decided to end the mobile phone business from the end of July this year at the board of directors on the 5th. The development of new smartphones and tablets has been stopped, and existing products are sold only until inventory runs out. As LG Electronics cannot supply the latest LG smartphones to members of the trade-in program, it is inevitable to modify the program.
In the industry, various scenarios such as insurance premium reimbursement and compulsory exemption emerge as LG Electronics’ countermeasures.
First, there is a method of returning insurance premiums paid by program subscribers in cash or LG Electronics online mall points. In this case, program subscribers can receive a maximum of 200,000 won back. In addition, you can purchase other products of LG Electronics with the points paid.
However, there is no gain to return to the mobile phone service provider and the used phone service provider who ran the program together. In addition, as the’insurance rebate amount’ is less than the’prepaid waiver amount for installment payments’, subscribers can feel that their benefits have decreased.
For this reason, a plan to ease the obligations seems promising. After using the device for 24 months and returning the device, even if you select a smartphone other than LG Electronics, such as Samsung and Apple, the remaining installment payment is exempted. In this case, carriers can also retain subscribers. However, there is a possibility of a conflict with the business operator in charge of the purchase due to the decline in the used smartphone market price.
An official from LG Electronics said, “We are currently in discussions with mobile operators about the operation plan of the compensation program,” and said, “We plan to disclose a plan to satisfy consumers as soon as possible.”
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