Apple has a 10% restocking fee on opened non-defective products, but AT&T seems to think that this applies to iPhones that are defective right out of the box.

Reader Frank recently purchased an iPhone that has a couple dead pixels and some other flaws and he’d just like to exchange the phone for a non-defective one.

Frank writes:

I enjoy your blog quite a bit and are probably already aware of this issue. You may want to remind readers of the problems they’ll face trying to exchange an iPhone they buy at an AT&T Store. The short of it is you can’t exchange a damaged iPhone at the the AT&T Store you bought it at unless you pay the 10% restocking fee. This is Apple’s rule according to AT&T but one AppleCare rep I spoke to today was surprised they wouldn’t exchange an OTB damaged iPhone and even tried calling AT&T for me. My experience is detailed below. Photo link on my OTB damaged iPhone follows…

I purchased an iPhone at the AT&T Store (5818) in Salinas, California on Black Friday. I turned it on at home and noticed 8-10 bright pixels showing up on the black startup screen. I wasn’t happy about that but thought I could probably live with it. I turned my attention to the case, and noticed a flaw in the aluminum and another minor flaw near the SIM card holder. I was a little upset and finally decided that my brand new, $399 iPhone needs to be flawless (like the picture on the box).

So I call the AT&T store (11/24 at 2:30pm) and ask about exchanging it (I haven’t activated or made a call on it yet). The store manager is nice enough but said that they don’t have an exchange policy. If I want to exchange it, then I have to return the phone, pay a 10% restocking fee ($39) and buy a new phone. He says there is no way around this because the system automatically puts the charge on when you return the phone.

I couldn’t help but point out the Catch 22 situation here. Since there is no way to inspect the iPhone before you buy then you are at the mercy of Apple’s quality control. If they mess up, you pays for the error if you want to exchange it at the store you bought it from. Though not likely, what if my next iPhone is damaged out of the box? Yes, cha-ching… another $39 to exchange it.

The call to the Salinas store manager went pretty much as expected and he said that my best bet was to try calling Apple. I thought: “Great… refurbished iPhone.”

So I call Apple (3:30pm) and the AppleCare Rep guy is understanding and all but the best he can do is send out a refurb. However, he tells me that he is going to to talk to Customer Relations and explain what was going on and see if they could send out a new phone. He says hold tight and put me on hold. About five minutes later, the phone resets to the main menu. I repeat my selection and the call disconnects.

I call back (4:00pm) and 15 minutes later I’m explain why I’m calling again to a new AppleCare rep. She listens and decides to talk to a product specialist about the issue. She comes back and asks if I talked to a manager at the AT&T Store, I tell her yes and reiterate what the store manager said. She seems a little surprised they won’t swap it since it’s damaged. No kidding.

She asks how close I am to an Apple Store and I tell her about 90 minutes which is a bit of drive. She decides to call AT&T herself and explain what is going on to see if I can get it exchanged. About 10 minutes later we both on hold to AT&T. I’m connected to an AT&T rep who spoke to the AppleCare Rep but doesn’t know who I am. The AppleCare Rep has disappeared from the line. The AT&T Rep says she called the Salinas store but there is no way they can waive the fee. Their system simply won’t let them waive the fee. She mentions the possibility of a credit to my AT&T account but that won’t work since I haven’t even activated the phone yet. Besides, what if this was a gift? That would be awkward. Ultimately, the AT&T rep decides she isn’t sure why Apple called them since it’s their rule regarding the 10% restocking fee. We figure out that I need to call Apple back.

I think about calling Apple back but it’s 5:00pm and I don’t feel up to it. At this point, I’m pretty sure I’ll just return the phone and take the $39 dollar loss.

On the brightside, I had the same issue with the aluminum case on my 3rd generation iPod Nano. Fortunately, I bought it at Costco and swapping out the flawed Nano was easy as eating cake. Too bad Costco does not sell the iPhone.

What a pain in the butt.

Apple Purchase Policy
(Photo:nfarley)

Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.