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Business / Technology

Apple ditches free return policy

By LUO WEITENG/MENG JING (China Daily) Updated: 2016-09-20 07:56

Apple ditches free return policy

An employee shows a customer the new iPhone 7 during the opening day of sales at an Apple store in Hong Kong on Friday.AFP

Apple has scrapped its longstanding free-of-charge return policy in Hong Kong and Macao, in a sign of the tech giant's determination to deter scalpers from making a quick buck on its newly launched handsets.

Apple had previously allowed customers in Hong Kong and Macao to return the undamaged products for free, with the original receipt and packaging, within 14 days of the pick-up date.

However, buyers will now be charged a 25-percent "open box fee" when returning their opened Apple or Beats products, and a 15-percent "restocking fee" for closed-box returns. A tailor-made return policy, in particular, has been introduced for purchases of more than four products from the same category.

The new policy was released on Apple's website on the same day iPhone 7 and iPhone 7 Plus hit stores in Hong Kong and Macao, where the lucrative scalping business has become commonplace and distorted the markets with the launch of every iPhone model over the past few years.

The exact reason behind the policy change, and whether it is a temporary move until supplies of the highly sought-after iPhone 7 models return to a normal level, remains unclear at the moment. It is believed the decision has much to do with the thriving re-sale market in the territories, where an iPhone 7 Plus can easily be resold at the moment at a 100-percent premium.

Hong Kong resident Thomas Li picked up his pre-ordered jet black 128G iPhone 7 Plus at the Apple Store in Hong Kong's Causeway Bay on Sunday. Having gotten his hands on the new iPhone model, which normally retails for HK$7,388 ($952), for a few minutes, he just as quickly sold it to a scalper waiting a few feet outside the Apple Store for HK$15,000.

Merchants at Sin Tat Plaza, Hong Kong's so-called iPhone exchange which determines the gray market's price for the newly launched iPhone models, quoted a price of up to HK$21,000 for a jet black 256G iPhone 7 Plus and HK$15,000 for a jet black 128G iPhone 7 Plus.

A 32G iPhone 7 Plus in gold or rose gold can be sold at a premium of more than HK$1,000 and the same-colored 128G model can be sold for HK$1,500 more than the official retail price.

Due to the lack to import taxes and duties, smuggling the latest iPhone models from Hong Kong into the mainland can be rather profitable, even though the mainland was selected in the first batch of markets for the launch of the iPhone 7.

Online preordering for the newly released iPhones kicked off on Sept 9 in the mainland. But many Apple enthusiasts complained about the difficulty of getting their hands on the large-screen iPhone 7 Plus and a jet-black iPhone 7. It is unclear if the shortages were the result of strong demand or limited supply.

Apple, which saw a 33 percent drop in sales in China in the quarter ended in June, pins its hope on the new iPhones to regain its business momentum in the country where domestic brands such as Huawei and Oppo have seen a surge in shipments.

Meng Jing contributed to this story

Apple ditches free return policy

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