Everything Everywhere admits defeat following Mobile News investigation, claiming it has proved “near on impossible” to totally eradicate the problem
Phones 4U and Three have launched an urgent investigation into breaches of store policy, following an undercover box-breaking exposÃ© by Mobile News.
The investigation (Mobile News, June 6), proved retailers and operators are powerless to prevent box breaking. This is despite their rules to prevent the practice, which operators claim costs them £300 million a year in lost revenue and subsidies.
Mobile News contacted and visited 23 stores posing as a tourist from Zimbabwe. We ordered quantities of high-tier handsets. Agreed deals could have resulted in £76,742 of sales on 254 devices.
Phones 4U came out particularly badly. A Phones 4U Tooting store manager agreed to sell our man 20 BlackBerry Curves. Another Phones 4U staffer at Camden said over the phone that we could buy as many devices as we wanted.
Phones 4U associate director of security and investigations Lewis Porter has requested further information. Phones 4U said in an official statement: “Following the release of the initial article Phones 4U has undertaken a thorough internal investigation. Once the results of the investigation are known, Phones 4U will, if applicable, take appropriate action.”
Three also confirmed it was following up our report that staff in its Tunbridge Wells and Wood Green stores broke rules by offering to sell us 15 iPhones and 15 BlackBerrys in total.
“Our retail policy is clear: only two prepay phones can be sold to customers per transaction,” said a Three spokesperson.
“We are investigating the claims made in the report and the appropriate action will be taken.”
O2 declined to comment on the investigation’s findings, except to reiterate its own rules on selling two phones to each customer per day. This would allow the purchase of up to 14 handsets from a single store over a full-week period.
Everything Everywhere, the parent company to T-Mobile and Orange, has admitted that it, or any retailer cannot eradicate the problem of box breakers from stores, despite its efforts.
A T-Mobile store in Ipswich offered to bend store rules to provide us with nine devices, while Orange stores in Wood Green and Manchester agreed to sell us 25 BlackBerrys in total.
Everything Everywhere VP of trading Neil Macgeorge said: “Box breaking is a significant issue, which has harmed the industry for too long. While we have measures to reduce the amount of handsets that are re-boxed and sold abroad, it has proved near-impossible to eradicate the problem entirely while we have individuals exploiting the subsidy differential.
“Lowering prepay handset subsidies is the first of a number of new initiatives we are kicking off, alongside a tightening of internal policies. We’re also strengthening our in-house revenue-protection team to monitor, identify and respond to any instances of box breaking from both inside and outside of our own retail estate.”