Considering customer have a plan with fido $50/month with x amount of data every month and adds phone from fido.ca as displayed below:
Customer is supposed to pay $25/month for Samsung Note 10+
So my question is simple, will there be taxes as
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Intersting, I didn't read this post before I posted my question, almost identical.. I made some assumptions.. let me know what you think...
So yes, the Promo Discount is deducated from the amount before taxes, however, the taxes are still calculated on the full amount before promo deduction.
This is not a standard retail to consumer practice, however, it has always been the standard business to business practice. In particular you see it with software sales to business customers sold at discount.
This helps Fido to inflate the the perception of a very significant discount you get, where in fact the discount after taking into considerstion taxes is much less. I guess many people don't pay attention to read the small print and wouldn't go back and return the open box device once they find out on their first monthly statement they receive well after they got accustomed to using the new phone and well after the return period is over.
So just be aware, if Fido puts the SRP $700 for a device sold for $150 (e.g. an older Iphone), you are paying way more money in taxes payments to Fido.
Clever accounting trick, possibly also helps their balance sheet look better since they are not writing off the unsold inventory, but instead hiding the discount as an expense into your contract.
Great question! This can be very confusing how Fido chooses to do the billing when financing a device with a discount.
A few things to note Fido only applies the promotion once per billing cycle so if you do the change during your billing cycle you will only get the promotion applied once.
The cost of the device will never change you will be billed in your case the full $63.25+tax for the device and the $38.25 will be applied as a monthly credit.
After your first invoice going forward, the charges should appear as follows.