AT&T: There's A $39 Charge To Exchange Your Defective iPhone

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


Edit Your Comment

  1. Mi1ez says:

    Welcome to vendor lock-in. This is the reason why the cell phone companies shouldn’t be allowed to force you to HAVE to have a cell phone contract. It should be optional and you should be allowed to go to whatever carrier you deem to be worth your business. :( Feh.

  2. ldavis480 says:

    I see a class action lawsuit in the making here. This is fundamentally wrong in so many ways. You should make a complaint to your states and county attorney generals’ office as this can’t be legal.

  3. jpp123 says:

    The word of the week is “chargeback”

  4. davidc says:

    I think it’s coming to the point where you can’t leave a store with electronics until you have opened everything up and inspected it.

    I think my new threshold is $99. If it costs more then $99 dollars and there are any “gotcha’s” on returns, I think I am going to *make* the sales person open it before selling it to me.

  5. davidc says:

    Also note: Never buying anything from AT&T. I don’t care if they blame Apple for this stuff or not. If they won’t take responsibility to do the right thing, then they are not going to get my business.

  6. mexifelio says:

    Print some fliers with your story on some bright colored paper and tell at&t that you are going to stand outside their store all day long passing them out to prospective customers until they give you a new phone free of charge. If you don’t have the time to do this then stop by home depot and find someone that will do it for a few bucks :)

  7. Bodgy says:

    This happened to me as well. One call to Apple Care and they sent me to an Apple store for a replacement. Now, they did try to replace my few days old iPhone with a refurb. I complained and they gave me a new one out of the box. I did have to drive about 2 hours for the replacement but I combined it with a shopping trip.

  8. xgenius says:

    I’d drive to the Apple Store. Then can swap it for a new one without a doubt. I’d have an Applecare agent call the retail store and speak to a manager on your behalf. They can simply DOA your phone and take one from their inventory. Don’t settle for a refurbed exchange from the Genius Bar.

  9. mmwwah says:

    That’s odd… My iPhone was defective, and they exchanged it with no hassle and many apologies. The communication between the CSR on the phone and the dope in the store was flawless too (even though the store clerk was clueless). The whole thing was one of the best customer-service experiences I’ve had lately.

    Could stores or states differ? I’m in Southern California.

  10. marsneedsrabbits says:

    I think it’s coming to the point where you can’t leave a store with electronics until you have opened everything up and inspected it.
    So true.
    I like your 99 dollar rule & think I will adopt it.
    I went shopping for a new digital SLR last week. I asked to see the box before I purchased it and the clerk handed it to me at the back counter. I started to open it & he told me I couldn’t.
    I told him I was either going to look at it or I wasn’t going to buy it.
    He let me open it. All was well. I bought it.
    If Manufacturers were smart, they’d start providing a window to the item.
    As it is, they either have to allow us to open stuff or lose the sale.
    I can’t afford several hundred dollars worth of tile, text books, rocks, old newspapers, etc. in place of my purchase.

  11. warf0x0r says:

    With this being said, think I’ll get an Ocean over an iPhone.

  12. trujunglist says:

    Really, you should just take the drive to the Apple store or really cause a fuss on SOS APPLE. They’re clearly more concerned with your problem (and overall) than AT&T is because AT&T has clearly adopted the “it’s Apple’s problem” attitude for the iPhone. Apple is a very customer friendly company and will, without a doubt, exchange your busted iPhone for a new one. They may try to give you a refurb but do not take it, just keep politely insisting on a brand new one. They will give it to you. You probably won’t even have to talk to a manager, but if they keep insisting on the refurb then ask. The manager will DEFINITELY solve your problem. That is what Apple does, mainly because they don’t want a huge scene taking place at the genius bar. Can you imagine the negative effect of someone causing a hissy fit in the middle of a busy shopping day over one of their newest and supposedly greatest products? They will avoid that at all costs.
    I had a similar experience with my brand new, 1 week old Rev A G5, and after a very long process (several weeks to repair with essentially the entire computer undergoing a lobotomy.. that, or they didn’t know how to fix it which wasn’t confidence-inspiring, hence the follow up to the story) they asked me to take it back sign some piece of paper that stated I accepted the machine. I would not accept the machine and asked for a full refund. After a lot of arguing my point with some genius people, they saw that I wasn’t going to budge until I got a refund (actually, all they had to do was apologize profusely and I would’ve been OK with it), and brought out the manager. The manager IMMEDIATELY apologized upon seeing my distress and offered me a gift card for 10% of the original purchase price! I was nearly in tears due to distress (I’m not an excitable person and rarely, if ever, would do something like that) before he came out, but he quickly resolved the problem and I immediately bought the extended AppleCare for the G5 as a way of telling them that I wasn’t trying to take them to the cleaners, I just wanted a working computer.

  13. univision says:

    I agree with most people here. DO NOT buy the iPhone from AT&T. Go to your Apple Store, or buy it from Apple online. Apple retail stores are very good about this and you can even read here that for a short period when they first came out, even if you dropped it and the screen cracked (in other words YOU were at fault) Apple would replace it. My roomate works at the Apple store and she tells me that sometimes, if you go when they are busy, they will take a look at it, and if the defect is obvious, they wont even book the Genius Bar appt. They’ll just swap it out (since it had not been activated). Be smart.

  14. Brothernod says:

    “So we came out with the RAZR and we expanded our free mobile-to-mobile calling to 46 million customers — no carrier had ever done that before. We extended our warranties to 30 days, return it with no questions asked. “

    This is a quote from an interview with Ralph de la Vega, CEO of AT&T Mobility, at Engadget. According to him, and he’s pretty high up, they have a no questions asked 30 day return policy.


    I doubt this will really help you, but I think it further shows how messed up their system is if they’re even touting the simplicity of their return system when you’re having so much trouble.

  15. rmeehan17 says:

    the RSC you spoke to is full of shit. I personally have both witnessed exchanges and exhanged defective iPhones myself with no restocking fee. The system absolutely WILL let you waive the restocking fee so long as you have a good reason (like, I dunno, the fact that you’ve had it for less than 24 hours and the screen won’t come on). The issue here is manager discretion more than likely, meaning that the boss of the guy you spoke to is an asshole.

  16. ndonahue says:

    Let the Consumerist be your guide! Get in touch with MaryMichelle… See the posting from last July: []

    Escalate responsibly…

  17. brennankeller says:


    As a AT&T employee I can tell you that it is IMPOSSIBLE from the system that we use within the stores to return an iPhone without it automatically charging the restocking fee, and even then there is no way to edit that fee. (if by some magical way you are able to do this please do share).

    If you disagree then maybe you should checkout CSP since you’ve returned them yourself before… it is stated on one of the documents within that site that the restocking fee will be addressed automatically.

    This is not AT&T’s doing unfortunately, it is all in the contract with Apple that says that we are not able to service/exchange the iPhone. thats the reason there is the restocking fee if the shrink wrap is taken off the box, and the reason that we put in iPhone in a sealed bag instead of the typical ones.

    Now i love apple to death, I use a iPhone and am typing this on a macbook pro, but they wanted complete control over the phone and because of that retarded ideology AT&T RSC’s can’t service or exchange iPhones

  18. chocxtc says:

    @ryan: I agree with you 100%. I have had to exchange two iPhones and counting. However, I did it at an Apple Store and since I was already a Cingular customer I think I have avoided the nickel and dime crap other customers have been exposed to.

  19. LAGirl says:

    after getting this much run-around, i would escalate and send an email directly to Steve Jobs: give all necessary info i.e. what you purchased, where + when, the problem, your contact information (including day time phone number). as consumerist suggests, keep it professional + stick to the details.

    you WILL hear from someone. and, they will go above and beyond. i had a problem with my iBook recently, and was getting nowhere with the ‘geniuses’ at Apple. i emailed Steve jobs, and received a call from one of his executive assistants within a few days. she was amazing and really tried to help solve my problem.

  20. mikecolione says:

    It’s Apple’s rule that exchanges need to go through them.

    Anything device related has to be handled by Apple, anything network related goes through AT&T. This should have been explained to you by the rep at the AT&T store.

    Many consumers hear what they want, don’t read the terms and conditions on the box/bag/pamphlet, and then want to plead ignorance when something comes up. It doesn’t work in court and I’m sick of people screaming lawsuit when they don’t get their way…

  21. Buran says:

    @LAGirl: Really? I sent a nice polite complaint when a delivery date, repeatedly promised as a delivery date, turned into a ship date when millions of other buyers got their product on the promised delivery date.

    No one contacted me. Executive customer service sat on its ass.

  22. Buran says:

    @mikecolione: I hear all the time of AT&T exchanging defective phones. No third parties included. AT&T sold it, AT&T’s responsible for supporting it.

    You really think HTC will exchange that Tilt you bought from AT&T if the screen died on day one?

  23. jkhazael says:

    The same thing happened to me at the Washington DC store. My iPhone camera did not work. The screen was green and the pictures were green. I took it in and they said I needed to pay the 10% restocking fee, I refused and took it to Apple. The genius confirmed I had a lemon but said since I bought it from AT&T i needed to return it to them. Went back to AT&T and found out that managers (only) can override the 10% fee. Unfortunately, there was no manager, and I was leaving for Thanksgiving. Had to take the $40 credit. I asked for documentation that the credit would be on my account, and was told AT&T policy is to not giving written documenation. Refused to leave until the sales person gave me a hand written note promising the credit. So ANNOYING.

  24. jkhazael says:

    Also, making the sales person open it does not work at AT&T. They won’t open it. They make you open it in front of them and tell you that the moment you open it the 10% fee applies.

  25. Mark 2000 says:

    I bought an iPhone at an AT&T store. It doesn’t matter. I still took it to an Apple Store for replacement this weekend. In fact, the ATT store TOLD me that Apple would handle any warranty and tech stuff. AT&T doesn’t handle the phone and you shouldn’t expect them to. Go to an Apple Store no matter what. They just make sure you have an ATT account, they don’t care where you bought it.

  26. vastrightwing says:

    Let’s recap here:

    Verizon: burns your house down trying to install FIOS, has phones that alert criminals you’re dialing 9-1-1 with a loud tone so they can find you, and also can’t tell the difference between $0.02 and 0.02 cents.

    AT&T: Cingular with a new name, charges you high fees for service and high fees to exchange defective phones. Has massive outages and lies about it. Won’t renew rate plans since they are planning to increase rates.

    Wow, who do I choose?

  27. skamikeyp says:

    Again i dont think people understand. AT&T will exchange a tilt, shine, blackjack, ect because they are not under strict CONTRACT TERMS. Our information we received on launch day, and all communications thereafter, state specifically that NO Iphones shall be returned without a restock. So what if it defective, then? Apple. That is how APPLE wanted it. I have had to turn away many customers because we were just not able to help. it makes me feel foolish, but it isn’t my call. We can’t magically make the system do something it is incapable of. That is why the iphone is placed in a sealed bag in at&t stores; to ensure that none of us at the stores open it to void the return. Face it, not EVERYTHING is AT&T’s fault. Its spoiled people who believe that the customer is ALWAYS right…and in this case, they are right, but there is nothing AT&T can do; it’s Apple’s issue.

  28. jkhazael says:

    @skamikeyp: That does not make sense to me when I was told that a manager had the power to override the charge.

  29. parad0x360 says:

    @skamikeyp: Every charge at a store can be canceled out by the right person.

    As for your situation..I’d go in there and work out some kind of deal. If they wont knock off the restock fee because “they cant” ask them for compensation via $39 off an accessory or something. I know that isnt ideal but guess what…you bought into the hype.

    Once the iphone is free to all providers this kind of BS will go away, but until contracts are around the cell companies all forever screw the American public and we will continue to let them and continue to spend $5 on a ringtone that plays 30 seconds of a song. God Bless America!

  30. Bruce says:

    I can’t stress this enough sheeples – READ the Magnuson Moss Warranty Act!


    Search the above link for the word ‘defect’ to find the relevant sections.

    Here are some of those points explained in plain English by an *authoritative* source on the subject.


  31. MattofBostone says:

    @JKHAZAEL and Paradox 360- That charge cannot be over ridden by anyone at AT&T. They can exchange phones that are not the iPhone if they are lemons but that policy was put in place by APPLE, not AT&T. I know there isn’t a whole lot of love for the Evil Empire here but facts are facts, just because someone at apple in tech support who has no familiarity with the situation told you they should does not mean they are right. I am a big Apply Fanboy but even I have to admit this is there fault.

  32. nsxdavid says:

    My iPhone developed a bad spot on the touch screen several months after I got it. I took it to an Apple store and they just handed me a new one. I plugged it in, and iTunes restored it to the condition it was before. Simple, quick and painless.

    About a week later, the new iPhone developed the same problem with the touch screen (in a different spot). I took it back, they apologized and gave me another new one which has worked fine since.

    I actually bought the iPhone at an AT&T store, but I never even considered trying to take it back there for this sort of help. Apple, at least in this case, handles this very well.

  33. MTLEM says:

    Ok, So I bought an iPhone, and decided to return it , unopened… the system tried to charge me $39. This was 5 days after I bought it.

    So the manager had to override the return and another emplyoee, in addition to the clerk I was working with had to verify it on the system, so I would assume they can do this for you by telling the system it is unopened and/or defective.

    I would pressure the manager of the store to escalate this to his manager if they are unwilling to exchange it as a defective unit.

    It also seemed to take a while for the manager to figure out how to do the override, this was at the San Ramon, CA store.