Pricing for Pixel 4a is out of whack

[MattinToronto]

I'm confused by the "Full Price" listed for the Fido 4a.

The phone direct from Google is ~480, (regular price shipping included) but Fido states that "Full Price: $560.00".

Now, the price per month over 24 months ends up costing about 480 plus tax (at the "special pricing" currently listed) - so no complaints there.

But the full price amount being artificially inflated means that when we purchase the phone through Fido the tax we pay upfront is going to be higher than it should be. Or, if we need to buy out the remainder to switch phones or leave early, we'll pay more. So what's going on there?

Either: 1)it's a typo 2) Fido pays more for their phones in bulk than I do buying one (unlikely) 3) the values assessed as full price are just randomly assigned based on mood maybe?

[Amb21]

I don't understand what you mean.

The phone on Google is $480 + tax = $550

Fido's price is $550 + tax = $625

If you are able to buy it outright, then obviously you're better buying it from Google (although you'll have to wait for it for a while) and get a BYOD plan. 

If you can't pay the full amount right now, Fido offers you, for a fee of course, the option of getting your phone right now and repaying in monthly installments. 

Right now, find is offering $19.95/month promo (which is a bit over $23/month) over 24 installments = $552, google's price after tax. 

Am I not understanding what you mean? 

(approx amounts, give or take a dollar) 

[MattinToronto]

Thank you both for taking the time to reply.

What I take issue with is that this sort of pricing is at the very best a misdirect to be able to claim a 0% APR financing while effectively charging one.

@Amb21you mentioned a fee. And @FidoKenny you mentioned financing. To the first part I’ll argue that nowhere is a fee mentioned. Fees should not be implied they should be explicit. To the second I’ll argue that financing is stated to be 0%, so the method of payment (financing) should not affect the total cost.

And, even if I bought the phone outright from Fido I’d still have to pay significantly more than what it costs - even though then there is no service for which I should pay a fee and no amount I am financing. So what would I be getting for the inflated price then? Probably the Fido My Account app pre-installed?🤔 Score.

If anyone wants to know how inflated a price feel free to read on below:

Let’s ignore the tax for a moment. If you take the real to consumer unit price (manufacturer price) and calculate for 24 payments at the *normal* offer monthly rate, you would get an equivalency to an APR (annual percentage rate)  of about 15.2 percent when you are done paying for the $560 unit. For context, credit cards in Canada charge an average of 19%.

But of course we have to pay tax so what does that look like? Let’s use Ontario as the example tax rate (13%), on the inflated base price and on the monthly fees. Working that into the total cost for the unit let’s compare:

Google price: 479 (unit price ) + 62.27 (tax) = 541.27 (total cost)

Fido price: [23.34 (per month fee) + 3.03 (tax)] * 24 months  + 72.80 (tax on Fido price for unit when purchased) = 705.68

Now I’ll be fair and include that at the *special price* that is currently being offered the total cost to customer is 614.12.  So, at the temporary special price that would be equivalent to paying an APR of ~12.5%.

My complaint of it being out of whack pricing stems from a lack of transparency to the consumer. Businesses exist to turn a profit, obviously, but that doesn’t mean it’s cool if they mix all the costs together to avoid showing what their cut is going to be. Especially if I’m the one paying it. 

[ravedave2]

wait till you see the prices for samsung phones,

example: Galaxy S20 - 1200$+tax on samsungs website (0% financing available) 
fido: 1650$+tax!!!!! 

[FidoSaad · Accepted solution]

Hey there @ravedave2, @MattinToronto,

To clarify, the main difference would be that we offer you the option to finance it over a 24 months period. This is a great option for customer who are unable to fork out the full price.  We charge no interest on the financement amount compared to credit cards, as mentioned in your example.

As a side note, promotions and discounts are available for a limited time only, and will vary. Our prices are regularly reviewed, so you can keep on eye on our ongoing bill credits discounts directly on Fido.ca.

This also means that the discounts we offer may give you more value for your purchase. Here's a quick breakdown:

1. Google Pixel 4a is $479+tx at full price with Google. We offer it at $560 at full price or at $479+tx after the bill credit of $3.38 ($560 - $3.38 *24 = $479).
2. Samsung Galaxy S20 5G 128 GB is $1199.99+tx at full price with Samsung. We offer it at $1650+tx at full price or at $1080+tx after the bill credit ($1650 - $23.75 * 24 = $1080). A down payment of $280 is currently required for this purchase.

In other words, our pricing and promotions can offer you more savings, on top of that you may also combine other offers with your phone upgrade, based on our ongoing offers.

Please note that the price of your monthly plan is not added in the example above as it applies either way, with or without financement.

Hope this helps!

[MattinToronto]

This issue does not feel as though it was solved @FidoSaad.

Your example of Samsung for instance? They offer a 0 % APR to Canadians. On the non-inflated price. The price you typically require the application of a bill credit you mentioned just to get down to. Google only offers one to US customers of their store at this time. Should not the same phone, with the same financing options, cost the same to the consumer?  

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To clarify, the main difference would be that we offer you the option to finance it over a 24 months period. This is a great option for customer who are unable to fork out the full price.  We charge no interest on the financement amount compared to credit cards, as mentioned in your example.

...

1. Samsung Galaxy S20 5G 128 GB is $1199.99+tx at full price with Samsung. We offer it at $1650+tx at full price or at $1080+tx after the bill credit ($1650 - $23.75 * 24 = $1080). A down payment of $280 is currently required for this purchase.

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[FidoKenny]

Hello @MattinToronto 

Yes, as a provider, the prices set for a phone can be different than what the manufacturer offers on their end.

You get the advantage of getting a financed device and we sometimes offer promotions along your financing amount.

Also, the financing, allows you to avoid paying full price for the device right away.

Hope this helps.