Question: “I just got my latest cell phone bill and one of the line items is ‘upgrade fee’.  Can you please tell me what this is for?”


Answer: In simplest terms, a cell phone upgrade fee means that at some point within that billing cycle you received a new phone from the company at a discount, and the company has charged you a fee to help offset those upgrading costs.  Here’s the tricky part… even if your phone is NOT technically an upgrade (for instance if you had an Iphone 4S and you got a new Iphone 4S) or even a “downgrade” (for instance, going from a Samsung Galaxy S3 to a Samsung Rugby basic phone), you will still be charged an “upgrade” fee if you were given a discount on your phone.

“What are the rules for an upgrade?”

This varies from provider to provider, except for the required commitment.  In order to get the best deal, all four of the major providers do require you to start a new 2-year commitment.  But here’s the breakdown of the time requirements and fees.  AT&T, Verizon and Sprint all require you to be 20 months into your 24 month contract (with Sprint having dropped that requirement from 22 months in 2011, and AT&T raising theirs from 18 months in 2012), and T-Mobile requiring 22 months.  As far as the fees go, AT&T and Sprint each charge $36, Verizon $30 and T-Mobile $18.

“Why won’t they refund the fee?”

This is something that I’ve seen a lot of on the provider’s message boards, and on tech message boards in general, especially in the last few months as the providers have cracked down on refunding these fees.  “The retail clerk in the store told me that if I called, they would refund my fee, but they refused and I’m mad!”  This complaint breaks down into three parts.  The first part is that, regardless of what you were told by the retail clerk, the upgrade fee is part of your contract.  I know that no one reads the entire contract… Zod knows that I don’t… but that doesn’t change the fact that it is part of an enforceable contract.  The next part, and the part that kind of sucks, is that the more that a retail clerk can sell you, the more money they make, whether they can actually follow through on that promise or not.  So my advice would be that, even if a retail clerk promises a waiver of the upgrade fee, don’t be surprised or upset when you see it on your next bill.  The third and final part is logic… if the retail clerk promised you that there WOULD be an upgrade fee, and then a later clerk said that they would waive it, would you insist that the company honor the promise of the first clerk?

Hope that this clears this up for folks.

Randal Schaffer