Back when I was writing my post on the worst return policies, I almost lumped in every contractual wireless service provider due to their pesky early termination fee penalties that are enforced in order to lock you into false brand loyalty. However, EVERY ONE of the four national carriers make early termination fees a central part of their contractual agreements.
I understand the business reason behind early termination fees. However, if my service or device is awful and you’re a customer focused company, you will try to make things right and not add insult to injury by stinging me with hundreds of dollars in early termination fees. For that reason (and lower costs elsewhere), I decided a few years ago to make the move to prepaid, no-contract cell plans. A few of the BIG 4 carriers offer prepaid plans now, but the cost is usually prohibitively high (either by service cost or device) to entice you into jumping into a contract.
What is an Early Termination Fee?
It is quite possible that you have never had to pay an early termination fee. If you have, you know how painful they are. If you have not, they essentially serve the dual purpose of:
- Allowing the service provider to recoup any discounts they may have given you on equipment so that they don’t lose money on any customer.
- Acting as a barrier of exit if you find a better offer elsewhere or simply want to end your service before your contract is up.
Often times, when you receive a discounted phone for being a loyal customer, your contractual agreement renews, and most do this without mention.
I’ll rank order the four national cellular service providers early termination fee policies from best to worst, and then offer up a few alternatives if you want to avoid them altogether.
#3: T-Mobile Early Termination Fees
T-Mobile does not charge early termination fees.
# of days to cancel without early termination fee: n/a
Restocking Fee? The T-Mobile restocking fee is as follows:
- $70 for devices with a FRP of $600 or more
- $40 for devices with a FRP between $300-$599
- $20 for devices with a FRP of less than $300
AT&T brings their ‘A-Game’ by boosting termination fees up to $325. They also have a restocking fee for all devices.
- Smartphones: $325 (minus $10/mo. you had service)
- Basic phone, tablet, mobile hotspot, AT&T Wireless Internet, or other connected device: $150 (minus $4/mo. you had service).
# of days to cancel without early termination fee: If you have agreed to a one-year or two-year service commitment, you have 30 days after purchase (or shipping date, if equipment is shipped) to cancel your service without incurring a Cancellation Fee (also referred to an ETF)
Restocking Fee? up to $55, if made within 14 days.
Verizon is the worst of the worst with the highest early termination fees, ZERO pro-ration based on how many months of service you’ve already paid for, and a restocking fee to boot. Customer beware.
If you cancel while you are under contract, you may be charged an early termination fee. The early termination fee is prorated, which means that as more time passes, you will pay less to terminate the fee. Early termination fees can cost a maximum of $350 and decrease by $15 per month.
# of days to cancel without early termination fee: Verizon gives you 14 days from activation to cancel without having to pay early termination fees.
Restocking Fee? You may return or exchange wireless devices and accessories within 14 days of purchase. A restocking fee of $50 applies to any return or exchange of a wireless device (excluding Hawaii).
How to Avoid Early Termination Fees
If you want to avoid the early termination fees, you have to go with a no-contract, prepaid provider (aka MVNO’s). You’ve heard me talk about a few of these before, but they are worth mentioning again. The problem with some of these plans is that if you do want a top of the line device, you are going to have a significant up-front cost to buy that phone, as they are usually not discounted. Factor in the cost of the phones into the monthly service costs to get a true comparison to a contractual offer. Older, or less advanced models, on the other hand, are usually dirt cheap.
- Xfinity Mobile: Xfinity does not have early termination fees.
- Republic Wireless: If you want a more advanced phone that uses Android, the cheapest unlimited data/text plan with call time is through Republic Wireless. You get unlimited data, text, and voice minutes for $25 per month ($10 if you’re happy with wifi-only data). Republic can do this because they’ve optimized their phones to connect to wi-fi networks, when available, and T-Mobile’s network when not.
Early Termination Fee Discussion:
- I’ve never heard of an example of someone getting their early termination fee waived unless it was within the introductory month. If you were able to avoid early termination fees, let us know how!
- Have you abandoned contractual agreements because of early termination fees?