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3 Good Reasons to Buy a Smartphone at Costco

Motley Fool - Sat May 27, 5:00AM CDT

A smiling person sitting on their couch and looking at the phone in their hand.

Image source: Getty Images

Costco may not be the first place that comes to mind when you're shopping for a smartphone, but for the sake of your personal finances it may be worth considering. The prices are competitive, the models are up to date, and Costco usually gives you more than just the smartphone (like a case, screen cover, or extra charger).

If you're dreading the experience of buying a smartphone from a phone store, here's three reasons why Costco might just be the best place to buy your next phone.

1. No upgrade fees

Many cellphone providers charge a one-time "upgrade fee" for buying a new smartphone or connecting a new device to its network. For example, Verizon, AT&T, and T-Mobile all charge $35 for new phones or new lines of services.

When you buy a new phone at Costco, however, the $35 upgrade fee is waived. Just pay attention to ensure your local Costco actually waives the fee for you. Since Costco has recently replaced its third-party cellphone service -- Wireless Advocates -- with T-Mobile and AT&T, these two companies may forget Costco waives the fee. Check your receipt after you buy and make sure there's a big "$0" under the upgrade fee.

2. Costco might offer you a gift card

Costco will frequently offer gift cards when you activate a new line on your network or buy a new phone. And Costco doesn't skimp on the gift cards, either. For example, in January, Costco was offering $150 gift cards for each new line activation on a T-Mobile network. Getting a Costco gift card for buying or activating a new phone means getting to save more of your own money on future Costco purchases.

3. You have 90 days to return it

Costco's return policy is famously generous. Most items have no timestamp for when you have to return them by, but electronics -- which includes smartphones -- have a timeline: 90 days, starting on the day you purchase it.

That's still a lot of time, however. For comparison, Verizon has a 30-day return policy, T-Mobile's is 14 days, and AT&T's is also 14 days.

The process of returning a smartphone at Costco is a bit peculiar, however, as you have to contact the carrier directly and initiate the process through it. In other words, you can't take your phone back to your local Costco and expect them to refund it on the spot. You'll have to contact your carrier (Verizon, AT&T, T-Mobile, etc.) and receive your refund through it.

It's worth mentioning, too, that Costco's smartphone prices are rarely higher than those found at phone stores. Toss in the fact that you can wander around Costco while your phone is being programmed, and you have a winning combination of convenience and cash in your savings account.

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