Apple places new limits on iPhone sales

[AppleInsider]

Apple last week stopped accepting cash for iPhone purchases and reinstated a two-per-person sales limit in an effort to curb the black market for unlocked versions of the touch-screen handset.

The new policy began Thursday, Apple spokeswoman Natalie Kerris told the Associated Press. Before then, there was no cash restriction and the purchase limit was five per person.

"Customer response to the iPhone has been off the charts, and limiting iPhone sales to two per customer helps us ensure that there are enough iPhones for people who are shopping for themselves or buying a gift," Kerris said. "We're requiring a credit or debit card for payment to discourage unauthorized resellers."

Since introducing iPhone on June 29th, Apple has sold over 1.4 million of the handsets, the company announced as part of its fiscal fourth quarter earnings last week. However, it estimated that approximately 250,000 of those iPhones were sold to buyers who intended to unlock them and then resell them for use on wireless networks other than AT&T.

The new sales restrictions are the latest moves by Apple in its game of cat and mouse with iPhone hackers. Last month, it released iPhone software update 1.1.1, which rendered unlocked iPhones effectively useless.

[ View this article at AppleInsider.com ]

[jawporta]

This is kind of bull shit. What do they care how people want to pay? What if I don't believe in Credit Cards I can't get a phone?

The truth is they hate receiving cash period. Apple Retail Employees are forced to use those stupid hand held cash machines because it gets Apple two things, your credit card number and your email address. I'm sure this new CC only for iPhones is just the beginning. Soon Apple Retail will be CC only.

[anantksundaram]

People have been getting bent out of shape and hyperventilating about this on places like cnet.com and engadget.com all weekend long.

All I can figure is that there are lots of resellers in those audiences.

Call me a fanboy, but despite the fact that it might inconvenience an occasional person who wanted to buy it just by himself/herself for a large family, I am with Apple on this one. With 15% to 20% of all sales being unlocked phones, creating a significant mass of user experience that is misaligned with what Apple intended could lead a lot of potential problems for Apple -- e.g., these same types will be caterwauling about broken software and hardware because of Apple's inability or unwillingness to fix it. In addition, use along those lines stiffs a partner -- albeit one that is not terribly sympathetic figure -- with whom Apple had entered into a good faith agreement. Finally, nothing would be worse that for Apple to introduce this in the UK, Germany, and France, and not have enough to meet demand. There will be a lot of p-o'ed customers that will have migrated to other smartphones.

I am amazed that people can't wait a few months. (On the other hand, as a shareholder, I must admit to being thrilled at what this presages re. demand for the product!).

[polvadis]

It's business tactics like this that draw me further and further away from Apple. I'm in between Macs, sold my iBook and haven't bought a replacement yet, but the more 'news' Apple makes the less I like them as a company. I'm sure there are two sides to this but I don't think there is a shortage of iPhones for sale, so what gives?

[mrjoec123]

Originally Posted by polvadis

It's business tactics like this that draw me further and further away from Apple. I'm in between Macs, sold my iBook and haven't bought a replacement yet, but the more 'news' Apple makes the less I like them as a company. I'm sure there are two sides to this but I don't think there is a shortage of iPhones for sale, so what gives?

What gives is that they're making some effort to keep on good terms with AT&T. Eventually, Apple will gain enough power in this market to shun its partners, but for now, without AT&T, there is no future for the iPhone. People keep forgetting that.

How much of an impact on this tactic will have on the unlocking business is debatable. I doubt it will stop many at all. But it will placate AT&T for now.

[tinker]

Apple just wants control over the platform.

Better in the long run, methinks...

addition to post:
- after having unlocked a bunch of U.S. phones for EU use.
- stw

[nagromme]

I always think it's best to assume the absolute worst. The press and anonymous commenters alike love to spin anything about Apple to mean the worst it could possibly mean. Believing them uncritically is the sensible route. Also: be sure to assume that AT&T has no say in protecting their agreements/contracts--it's sure to be 100% Apple's evil doing.

I feel just awful for all the folks with bad credit who wanted 3 iPhones

Question 1: is this two per household, or two per individual, or two per credit card, or two per day?

Question 2: will they accept a money order or check?

Question 3: will they accept a debit card or a pre-paid/secured credit card (both of which people with bad credit can still get)?

Question 4: will they take your credit card without getting your email address? (I can answer that from my own experience: Yes.)

[rbonner]

I agree with this move, but it would probably achieve the same result to just limit cash unit sales to a single phone per person per week, something like that. That way cash customers would not be out of luck.

[Isidore]

I don't know how the law is in the US but they certainly couldn't do that in the UK. Cash is legal tender. If they are selling something to the public they are obliged to accept cash.

[desarc]

Originally Posted by jawporta

This is kind of bull shit. What do they care how people want to pay? What if I don't believe in Credit Cards I can't get a phone?

if you don't believe in credit cards you're only going to get a pre-paid / pay-as-you-go phone anyway, and if you're trying to live "off the grid" why the 'ell would you get an iPhone? [or be online posting comments...]

[Ensign Pulver]

Originally Posted by Isidore

I don't know how the law is in the US but they certainly couldn't do that in the UK. Cash is legal tender. If they are selling something to the public they are obliged to accept cash.

It's just as illegal here and I'm astonished they're getting away with it.

"This note is legal tender for all debts, public and private"

You can't refuse cash.

[wbrasington]

Gee nagromme, I would'a thought you would at least take the time to read the article before you go overboard on the negative.
Why don't you just assume all computers break and don't buy anything?

The two per person limit, is just that. It's the same as they had for 5 phones... now it's two.
That means you can walk in and buy two.
Next week you can walk in and buy 2 more. The day after that, you can walk in and buy 2 more.

Ah, were you on here complaining about the 5 phone limit?
Do you have a problem with Apple or the policy?


So your question #1 is already known by everyone. (except you.... maybe?)

#2 - Do they take checks?
What ever the store policy is for ANYTHING else they sell.
They just won't take CASH for iPhones.

That takes care of #2..... for those reading the article.

As for question #3, they SAID THEY TAKE DEBIT, and a secured credit card IS A CREDIT CARD!
So you should understand the article said they take credit cards.

As for question #4, you already answered it.
The ONLY reason they need an email address.... is if YOU want them to email YOU a receipt.
Now, I'm not sure how you can blame THEM for a service they provide YOU.


I can tell you feel terrible for all those people with really bad credit that can't buy three iPhones during one visit.
I wonder, when carriers like AT%T won't sell service to them because their credit is so bad they can't even get a credit card, are you on THEIR websites blasting them?

[cameronj]

Originally Posted by nagromme

Question 4: will they take your credit card without getting your email address? (I can answer that from my own experience: Yes.)

Exactly. To all you dummies who complain about having to give your email address out, guess what? You don't. When they ask, just say "I'd rather not." Same with zip codes. You don't have to give any of that info. If you're dumb enough to give them info that they ASK for, and then even dumber to complain that you gave it, well, there's no hope for you.

[Bageljoey]

Originally Posted by desarc

if you don't believe in credit cards you're only going to get a pre-paid / pay-as-you-go phone anyway, and if you're trying to live "off the grid" why the 'ell would you get an iPhone? [or be online posting comments...]

People just like to complain. They may have no interest in being consistent...

[SpamSandwich]

Since I first reported this, now we have two threads... what's up?

http://forums.appleinsider.com/showthread.php?t=80367

[SpamSandwich]

Originally Posted by Isidore

I don't know how the law is in the US but they certainly couldn't do that in the UK. Cash is legal tender. If they are selling something to the public they are obliged to accept cash.

Expect another massive class-action lawsuit shortly.

[Bageljoey]

Originally Posted by wbrasington

Gee nagromme, I would'a thought you would at least take the time to read the article before you go overboard on the negative.
Why don't you just assume all computers break and don't buy anything?
<snip>
I can tell you feel terrible for all those people with really bad credit that can't buy three iPhones during one visit.
I wonder, when carriers like AT%T won't sell service to them because their credit is so bad they can't even get a credit card, are you on THEIR websites blasting them?

Actually, I think nagromme started out tongue-in-cheek and then was asking the listed questions semi-rhetorically--to point out that there would still be options to satisfy people.
Even if I read it wrong, I think your response is over the top.

[nagromme]

It's OK - I enjoyed the response

[amador_o]

Originally Posted by Ensign Pulver

It's just as illegal here and I'm astonished they're getting away with it.

"This note is legal tender for all debts, public and private"

You can't refuse cash.

Legal tender can't be refused to settle DEBT. Private parties, including buisness, don't have to accept cash. Think about how many places refuse large bills.

[ros3ntan]

Who carries $400 around? if you dont have a credit card, that might be an indication you better spend the $400 somewhere else..

i say the impact is not very much

besides i personally never seen anyone buys an iphone without a credit card.

[ioport]

Originally Posted by amador_o

Legal tender can't be refused to settle DEBT. Private parties, including buisness, don't have to accept cash. Think about how many places refuse large bills.

Apple is a *public* (not private) traded company.

[Abster2core]

"Legal tender can't be refused to settle DEBT. Private parties, including business, don't have to accept cash. Think about how many places refuse large bills."

You are absolutely correct.

From the US Treasury Site:
The Coinage Act of 1965, specifically Section 31 U.S.C. 5103, entitled "Legal tender," which states: "United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues."

This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. For example, a bus line may prohibit payment of fares in pennies or dollar bills. In addition, movie theaters, convenience stores and gas stations may refuse to accept large denomination currency (usually notes above $20) as a matter of policy.

When you think a bout it, some pizza delivery services will not accept cash. And try to but a Lamborgini with a bag of cash.

[Ladellex]

Depending on the Store and Manager on Duty, Apple is tracking consumer purchases. You pay with a Credit Card so that if the person transacting your order recognizes you or the CC or the email address they will verify your purchase history by having the MOD look it up in the system. So it is two per person unless you use a different CC period.

And they do require an email. If you don't provide an email they require a phone number. It is one or the other. The Point of Sale System will not let you complete your purchase unless email or phone number is captured.

They will not take Checks, or Cash. It is Credit Card purchases only, including Debit as long as it has a Visa/Master Card logo on it. I haven't verified gift cards yet. Seem likely they may accept this form of payment because it is still trackable.

Good Things...

Originally Posted by wbrasington

Gee nagromme, I would'a thought you would at least take the time to read the article before you go overboard on the negative.
Why don't you just assume all computers break and don't buy anything?

The two per person limit, is just that. It's the same as they had for 5 phones... now it's two.
That means you can walk in and buy two.
Next week you can walk in and buy 2 more. The day after that, you can walk in and buy 2 more.

Ah, were you on here complaining about the 5 phone limit?
Do you have a problem with Apple or the policy?


So your question #1 is already known by everyone. (except you.... maybe?)

#2 - Do they take checks?
What ever the store policy is for ANYTHING else they sell.
They just won't take CASH for iPhones.

That takes care of #2..... for those reading the article.

As for question #3, they SAID THEY TAKE DEBIT, and a secured credit card IS A CREDIT CARD!
So you should understand the article said they take credit cards.

As for question #4, you already answered it.
The ONLY reason they need an email address.... is if YOU want them to email YOU a receipt.
Now, I'm not sure how you can blame THEM for a service they provide YOU.


I can tell you feel terrible for all those people with really bad credit that can't buy three iPhones during one visit.
I wonder, when carriers like AT%T won't sell service to them because their credit is so bad they can't even get a credit card, are you on THEIR websites blasting them?

[ioport]

Originally Posted by Abster2core

"Legal tender can't be refused to settle DEBT. Private parties, including business, don't have to accept cash. Think about how many places refuse large bills."

You are absolutely correct.

From the US Treasury Site:
The Coinage Act of 1965, specifically Section 31 U.S.C. 5103, entitled "Legal tender," which states: "United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues."

This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. For example, a bus line may prohibit payment of fares in pennies or dollar bills. In addition, movie theaters, convenience stores and gas stations may refuse to accept large denomination currency (usually notes above $20) as a matter of policy.

When you think a bout it, some pizza delivery services will not accept cash. And try to but a Lamborgini with a bag of cash.

What's wrong with paying $400 in 20s ? I mean it's not even remotely close to your extreme car analogy no?

[SpamSandwich]

Originally Posted by ros3ntan

Who carries $400 around? if you dont have a credit card, that might be an indication you better spend the $400 somewhere else..

i say the impact is not very much

besides i personally never seen anyone buys an iphone without a credit card.

I remember hearing that the 'average' amount of cash on a person was $300-400.

[amador_o]

Originally Posted by ioport

Apple is a *public* (not private) traded company.

I think public, as in the case of legal tender, means civil. As in in City/State/Federal fees and services.

[parky]

Originally Posted by Isidore

I don't know how the law is in the US but they certainly couldn't do that in the UK. Cash is legal tender. If they are selling something to the public they are obliged to accept cash.

Not true, the law allows to to not sell you the item at all if they choose to.

Just because it is on sale does not mean they have to sell it to you, that is up to the store.

Ian

[parky]

Originally Posted by Ensign Pulver

It's just as illegal here and I'm astonished they're getting away with it.

"This note is legal tender for all debts, public and private"

You can't refuse cash.

You can refuse to sell something, just because it is on sale does not mean you have to sell it to someone.

[alienzed]

Originally Posted by SpamSandwich

I remember hearing that the 'average' amount of cash on a person was $300-400.

Where do YOU live?

[krsd]

Originally Posted by Isidore

I don't know how the law is in the US but they certainly couldn't do that in the UK. Cash is legal tender. If they are selling something to the public they are obliged to accept cash.

Legally Cash in the US is legal tender as well. A lot of companies are pushing that law though and so far from what I have seen have gotten away with it because no one has made a big enough legal issue of it. Granted a lot of the times the companies not accepting cash do it for practical reasons, but that doesn't make it right or legal.

Specific instances I have encountered where cash was not being accepted include:

• Apartment complexes for rent
• Airlines for in flight movies (which I refuse to pay for as a result)
• And though not technically refusing, most bills that are paid via mail.

I guess Apple can be added to that list now though.

Personally I have been debating between getting an iPhone and the Nokia N95, but if I were to walk into a Apple store and have them refuse me paying via cash... that would pretty much ensure that they wouldn't be getting my money in any other form either.

[Clive At Five]

Originally Posted by SpamSandwich

Expect another massive class-action lawsuit shortly.

I swear, if I hear this sentence one more time...

There's no case. Except where state laws apply, there's no clause anywhere saying that businesses MUST accept cash in exchange for products or goods. They can set up their own economic system if they so choose. It's like the rewards counter at that arcade. 10 tickets = a laffy taffy, but you can't buy it with cash. Apple could trade you an iPhone for 30,000 tickets but still refuse cash, if they wanted.

The only thing they can't legally exchange for are sexual favors, hard drugs, or any other form of service or good deemed illegal by law.

Originally Posted by SpamSandwich

I remember hearing that the 'average' amount of cash on a person was $300-400.

Right now I have $3 - 4... and I live & work in a Suburb. If I worked in the city, I'd hide my credit cards in my shoes. Anyone want to test a sample population to verify this "statistic?" I'd be willing to be that the average is around $150.

-Clive

[macshark]

Nothing wrong with not accepting cash for a retail transaction. Not very many online stores accept cash for transactions for example. Many B&M stores will not accept $100 bills or a jar of coins. US Treasury clearly states that cash is legal tender for debts but not necessarily for purchase of goods and services.

According to this article on DailyTech.com however, Apple does not accept Apple Gift Cards for iPhone purchases either. This is a bit of a problem as the only restrictions that are currently listed for Apple Gift Card are:

Apple Gift Cards may not be redeemed at the iTunes Music Store, Apple resellers, or Apple Store locations outside the United States.

Putting additional restrictions on what can be purchased with a gift card after the card has been sold to a customer may be stretching the limits of legality.

[Abster2core]

Originally Posted by ioport

What's wrong with paying $400 in 20s ? I mean it's not even remotely close to your extreme car analogy no?

Counterfeiting! Safety (clerks and staff)! Thievery!

Many convenient stores, gas stations and fast food outlets limit cash payments particularly late in the evening,

You have a car for private sale and a stranger says I'll give you 5 grand in cash for it. Sucker! And it can apply to either or both parties.

Even banks can refuse large cash deposits, particularly more than $10,000, unless the depositor can verify the source and fill in a pile of paperwork.

Paying off a debt is different. As long as the denominations are suitable. Can't for example, pay off a thousand dollar loan in pennies if the lender so refuses.

Contrary to much previously stated, most countries have the same position. Generally speaking, it would be most prudent and likely that accepting large amounts of cash for a retail sale is more complicated than accepting a credit or debit card these days.

[slicedbread]

I'm amazed by the anti-Apple rantings here. Listen, folks, no one has the "right" to buy or use an iPhone however they like. It's not guaranteed in the U.S. Constitution, or in any other law, for that matter.

Apple sells a product. They are perfectly within their rights to sell that product when, where, and how they choose.

As for not accepting cash, and requiring a credit card (or secured debit card), this is most certainly NOT illegal. Many, many companies do this. (Try to buy something on Amazon.com with cash. Go ahead. Or try renting a car from Hertz, Alamo, etc. Or maybe you'd just like to check in to a Hilton hotel...)

Obviously Apple has its reasons for this policy. If not, they wouldn't bother doing it. Maybe it has to do with keeping AT&T happy. Or maybe it's aimed at preventing all the future complaints from people who buy unlocked phones that stop working later, when a future software update is applied. Whatever the case, Apple has the right to restrict sales in whatever way they deem appropriate.

The message from Apple seems to be this: "you can buy the iPhone if you use it as we intend it to be used. If you have other intentions, go away." Those persons who feel that they are in some way legally or otherwise entitled to buy and use the iPhone however they like are simply ignorant, delusional, or both. (And judging from some of the posts here, they're also paranoid.)

As a shareholder in AAPL, I support Apple's efforts to keep the iPhone market under control and prevent unauthorized resellers. It's an important part of building a successful new product category.

[roehlstation]

Originally Posted by ioport

Apple is a *public* (not private) traded company.

That does not make it a public entity. Only a publicly traded corporation.

[lfmorrison]

Originally Posted by Ensign Pulver

It's just as illegal here and I'm astonished they're getting away with it.

"This note is legal tender for all debts, public and private"

You can't refuse cash.

Sure you can. Ignoring any legal arguments about which I am not qualified to comment, there are practical limitations which would make unconditional acceptance of any form of legal tender cash payment impossible.

Consider how successful you'd be in defending your position in the case of vending machines which would have to be equipped to accept legal tender $1000 bills and make change for your $1 candy bar.

Getting into the legal arguments, for which, I repeat, I am not qualified to comment, I would simply be regurgitating the opinions that I have read from various sources.

Basically, if you already owe a debt to any entity in the USA, public or private, and the issue builds all the way up to a federal court order that you must repay the debt, then the receiving party would be forfeiting its right to payment if it rejected an offer of payment-in-full using legal tender in your jurisdiction.

However, in the retail setting, a seller is always free to refuse enter into any sales contract full-stop, before the transaction has happened, and before any debt was created in the first place. Up until the time the seller has accepted the payment in a retail transaction, there is no contract and debt doesn't exist, so the legal tender argument is irrelevant. One conceivable condition they could place on entering into the agreement might be reaching a prior mutually-acceptable agreement on the mode of payment which would be used to settle the about-to-be-created debt; if the purchaser intends to use cash, then the seller can preemptively refuse to enter into the agreement to sell.

After the contract has been entered into and the debt exists, for example, after a fine dining restaurant has served you your meal, then a reasonable cash offer must be accepted as a form of payment. (But, offering a $1000 note for a $30 bar tab might be considered unreasonable.)

[Abster2core]

Originally Posted by macshark

According to this article on DailyTech.com however, Apple does not accept Apple Gift Cards for iPhone purchases either. This is a bit of a problem as the only restrictions that are listed for Apple Gift Card are: Putting additional restrictions on what can be purchased with a gift card after the card has been sold to a customer may be stretching the limits of legality.

Not really. Verifying the validity of the Gift Card is the issue. Ask a Canadian or any foreign visitor what happens when they try to pay in their own currency. Works the same in many countries for Americans as well. In particular, more often recently with the down turn of the US dollar.

And you think that you could send a gift card to a cousin in the UK and he/she should be able to go to any Apple store and use it. A gift card that could easily be replicated and outputted on your computer attached to virtually any usb inkjet printer.

[Abster2core]

Originally Posted by slicedbread

As a shareholder in AAPL, I support Apple's efforts to keep the iPhone market under control and prevent unauthorized resellers. It's an important part of building a successful new product category.

Agreed. Not any different than what we see more often now with concert promoters and ticket agencies trying to limit ticket scalping.

[Clive At Five]

Originally Posted by slicedbread

I'm amazed by the anti-Apple rantings here. Listen, folks, no one has the "right" to buy or use an iPhone however they like. It's not guaranteed in the U.S. Constitution, or in any other law, for that matter.

I agree with most of what you said but I want to point out that it IS legal to "use" your iPhone however you wish, but doing so may void your warranty. Apple can restrict cash purchases; they can pursue legal action with redistributors; they can refuse support for Jailbroken/unlocked/bricked phones. They cannot, however, pursue legal action, at this time, for the unlocking of phones for use with another carrier.

Just thought I'd make that clarification.

-Clive

[audiopollution]

Originally Posted by AppleInsider

Last month, it released iPhone software update 1.1.1, which rendered unlocked iPhones effectively useless.

<stares at his unlocked 1.1.1 iPhone>

Guess not.