Dear Lifehacker, I had to buy an iPhone 6 for work the other day, but I kept running into brick and mortar stores that refused to sell me an iPhone 6 unless I bought one on a plan. Are they allowed to restrict the sales of a hardware device unless they strong-arm me into a contract? Thanks, No Plans For Plans
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Here at Lifehacker, we’re generally advocates of buying phones outright and using a prepaid plan rather than tying yourself into a contract. For the iPhone 6 and 6 Plus, we carefully calculated how much more you’d spend if you signed up for a contract, and concluded that buying outright was generally a better deal. But just because we favour that way of buying doesn’t mean that it’s always going to be available.
In legal terms in Australia, stores are broadly entitled to sell you an iPhone 6 (or any other phone) on whatever terms they like and for whatever price they like. If you don’t like the terms on offer, your choice is simple: shop somewhere else. That becomes challenging with a highly popular device like the iPhone 6, where supplies to every retailer were limited. Under those circumstances, it’s not surprising that many outlets choose to favour selling on a plan rather than selling outright — they make more money that way, since they receive a cut of each monthly plan payment, not just the margin on the device itself.
Selling a device on a plan does create some different consumer obligations for the retailer — for example, if you’re signed up to a 24-month contract, you can absolutely expect warranty service for the life of that contract. However, there’s no absolute “right” to purchase a phone outright in Australia, and individual stores can elect not to do so. All you can do is keep hunting for another store, or order online and accept you’ll wait a while (Apple’s own store is currently specifying 3-4 weeks for delivery)
There are plenty of examples of hardware products that you never own outright, but simply rent month-to-month (Foxtel is one obvious example). The consumer regulator will intervene if it suspects that pricing is being unfairly rigged — say, if competitors tacitly agree to charge a given amount — but it won’t dictate the way in which products will be sold.
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