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TracFone's Commission Reductions Put Prepay Refill Out of Business

Online prepaid airtime dealer Prepay Refill is shutting down. Prepay Refill was noted for offering discounts of 6% to 10% on Page Plus, Simple Mobile, NET10, TracFone and Selectel airtime. Except for Selectel those are all TracFone brands.

Last month TracFone drastically cut its commissions to dealers, especially online dealers like Prepay Refill whose businesses was primary airtime sales rather than activations.

According to Prepaid Refill owner Gregory Pratt, 90% of his business was TracFone related and TracFone's commission reductions cut his profit by 88%.

In an email to Prepay Refill customers, Greg said that he is no longer processing payments for auto pay. For customers who want to continue using auto pay, Greg recommends Kitty Wireless as having reliable auto pay for Page Plus. For other operators Greg suggests setting up auto pay with the operator itself.

For customers looking for discounted airtime, Greg says there are still a few airtime PINs available on Prepay Refill. Once they are gone recommends:
  • For Page Plus: Kitty Wireless or Exclusive Cellular
  • For  Selectel Wireless: Batmobile Wireless
  • All other operators: CallingMart
Greg says he will resolve all open tickets before closing shop and will purge all customer data from the Prepay Refill system on May 18. 2016.

It looks to me like TracFone wants to drive online airtime sellers out of business and move online sales in-house. TracFone makes more money when it doesn't have to pay commissions and customers buy their airtime at full price plus tax from the various TracFone branded websites. TracFone's brands include PagePlus, Simple Mobile, NET10, Total Wireless and Telcel America in addition to TracFone itself.

Source Prepay Refill via Howard Forums

Related Post: TracFone to Drastically Cut Dealer Comissions on Airtime Sales

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43 comments:

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  1. I don't know how Tracfone sets its commission rates, but I could understand offering less to online-only distribution and more to physical stores. If it's as simple as this, then stores with omnichannel distribution would be more profitable with their online sales. But if the commission rate is differentiated not by classification of the retailer but the sale itself, then never mind.

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    1. I think the new commissions are based on sales and mix of new/repeat customers. There was an article here (or maybe hofo) about the change earlier this year.

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  2. I wonder if all this has to do with them offering more Verizon data. Guess we know where the money is going.

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  3. Just so I know, how does Verizon prepaid autopay work? Can I still add airtime refill cards with it? Will Verizon just take it from that balance or will they still take my cc I put on the account?

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    1. I haven't used ut myself buy people who have say that Verizon auto pay ignores your balance and always charges the auto pay card

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  4. Poorly crafted notice.

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    1. Cryptic comment. Touche.

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  5. Greg was my dealer when I had PagePlus for many, many years. Because of this kind of behavior on Tracphone's part, along with balances that mysteriously disappeared plus their clueless CS bordering on contemptuous, I bought a GSM Phone and switched to At&t. Best move I ever made. Out here in Pacfic Northwest, At&t's coverage is just as good if not better than Verizon and my monthly cell costs remained the same while getting unthrottled data and GSM phone freedom.

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  6. I used to get my pins from prepay refills for my Selectel account. I'm really sad that this dealer is going out of business and putting people out of jobs.
    It's sad because in the end it is the customer who will be affected, not only with pricing but also with lousy customer service from Tracfone.

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  7. Meanwhile, today I accept delivery of an LG Ultimate 2 bundled with effectively a 400 minute airtime card, a $130-140 value, for $60 after all promos from HSN. It must be that Tracfone very much values the exposure of those dimbo presenters who talk them up so enthusiastically at the sacrifice of accuracy, but does not value the many online dealers who know their stuff and are often more helpful than corporate CS.

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    1. As long as people buy like you did, Tracfone will think they made the right move.

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    2. If tracfone wants undercut their longterm reseller partners by advancing ten years! worth of "commissions" directly to the end users .... Good for them???

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    3. You have to think that the intent of these bundles is for acquiring new customers. I speculate that the main reason Tracfone does not restrict the bundles to new customers is to avoid confusion, as neither the HSN presenters nor customers can be trusted to acknowledge the communication necessary for such a restriction. Maybe the bundles and the HSN exposure are working sufficiently well at getting new customers. But they have probably determined a ratio of new to existing customers using the bundle at which offering it in this manner does not make sense financially.

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    4. Dealers add value by providing convenience and service - help when needed. When dealers drop tracfone and there are no other dealers nearby, you go to tracfone customer service for help. Works most of the time, but most tracfone customers don't read this blog, and they probably aren't as capable of solving problems as readers are. When CS doesn't fix your problem, your phone may not work, you may lose money or even your phone number. A good dealer could have helped prevent that.

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  8. I heard that Tracfone cut PagePlus commissions in half. Telling dealers to take a hike, unless they can activate new lines, in effect. Well, many of those dealers who build PagePlus are indeed taking a hike and won't be back if Tracfone's gambit fails and they want dealers again.

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  9. Carlos Slim is greedy

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  10. It looks like Tracfone's answer to a competitive MVNO market is raising prices, burning bridges and putting their dealers out of business.

    But TF's real problem is that their data prices just aren't that competitive.

    Cutting commissions won't fix that.

    In fact, it sounds like they've just made the problem worse.

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    1. TF is in a poor position. They are signing up partners to resell "resold" service, with both parties expecting a cut! When the first party operators squeeze competition by raising wholesale rates (to advantage their own prepaid offerings), of course something's got to give.

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    2. "But TF's real problem is that their data prices just aren't that competitive." I don't agree. What competitor offers unlimited talk and text and 5 GB on Verizon for less than TracFone's Total Wireless $35? Or on AT&T for less than Straight Talk's $45?

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    3. TF's data pricing is very competitive, 5gb on Verizon for $35 is a steal.

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    4. Where can I buy a Total Wireless SIM card? Only at walmart? Do I have to use a 3G only phone? what about an Iphone?

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    5. call TW customer service - Phone at 1-866-663-3633, agree to stipulations below, register phone and they will send you out a "replacement SIM" for your device.

      BRING YOUR OWN DEVICE

      Is the device you want to register in the Total Wireless Bring-Your-Own-Device Program currently active with another provider?


      currently active? OR currently inactive?


      How to Register a Currently Active Phone

      Check this box if you agree to transfer your currently active phone number from your current provider to Total Wireless. To successfully transfer your number, you must select the “I WANT TO KEEP MY CURRENT PHONE NUMBER" option during the Activation process.

      If you do not want to transfer your currently active phone number to Total Wireless and prefer to receive a new one, you must contact your current service provider to terminate the service associated with the phone you want to bring to Total Wireless (the phone must be inactive to be able to assign it a new number). Once your current service is terminated, return to this page, select that your phone is not currently active, and complete the registration/activation process at that time.

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  11. Tracfone derives the majority of its business, probably at least 80% from its tradtional retail outlets and its big box exclusive allies like Walmart's Straight Talk/Total Wireless. To them, dealer programs were basically an experiment that they inherited when they bought out both Simple mobile and Page Plus who were built by independent dealers. Because they undervalue the dealer and overvalue their Big Box Boys and retail outlets they of course don't want to share any of the profits with the dealers. Tracfone has historically been a good deal dollar wise if not service wise to customers and that's their business model, Quantity , not quality. For every one customer they lose, they simply jack up the amount of data for the monthly plans or throw a phone special that's low cost or lower their rates and they'll have ten more rubes to repeat the cycle. The small independent dealers built Simple/Page Plus are no longer needed in their view so they are circling their wagons around retail as Metro/Cricket/Boost bludgeon their dealers as they aren't giving their dealers the best deals to fight back with . Tracfone's ambivalent attitude towards its dealers reflects the same attitude most of the big four now have (with the notable exception of Verizon). Att, Tmobile and Sprint are engaged in a massive three front war with Cricket/Metro/Boost and the independent dealer is losing. Like a gang war, the little dealer has to pick a big gang to join or get wiped out. Independents like Ptel's failure and the faltering of promising ones like Defense mobile don't help. But there are still bastions of quality pro dealer mvnos out there like Selectel and Ultra. Unfortunately, there are also many good successful mvnos that have no margins for dealers like Ting and Consumer Cellular. This is going to be one of the toughest years for prepaid wireless dealers in a long time. I expect a good minority to quit. But then again this happened before .

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  12. Life's too short. Why don't TracFone/Carlos Slim haters should dump TracFone and find another mobile provider for which they feel less or no hate?

    ReplyDelete
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    1. Inertia. Lack of knowledge, and laziness to research. No friend to help. May have to buy a new phone and learn how to use and feed it. Most people like the tech they know. They resist change unless they know exactly how it will affect them.

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    2. Movil lost 460,000 subscribers last quarter alone, so they are, in droves.

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    3. Most of those 460k losses were Safelink cheaters that Tracfone should not have signed up in the first place. The rest were mostly dumbphone accounts.

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    4. Absolute mis-information

      "Most of those 460k losses were Safelink cheaters that Tracfone should not have signed up in the first place. The rest were mostly dumbphone accounts."

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    5. If you have any evidence, report Tracfone's "mis-information" to the SEC. If not, you should read more.

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  13. "Life's too short. Why don't TracFone/Carlos Slim haters should dump TracFone and find another mobile provider for which they feel less or no hate?"

    Tracfone is probably the most stable and economical way to get a significantly better network (Verizon) without paying its premium post-paid prices.

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    1. You're giving people too much credit. The average tracfone customer probably doesn't even know what network the phone will use. Besides, GSM coverage on dumbphones that use AT&T or T-Mobile as their home network is almost as good as their Verizon network dumbphones because due to many roaming agreements.
      Tracfone gets most of its customers because of their extensive retail channel strategy - they are sold where their subscribers shop.

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    2. Also the way to experience the absolute worst CS of nearly any company doing business in the USA. A rip-off company that could care less about it's customers which are treated as a burden and a bother.

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  14. "The average tracfone customer probably doesn't even know what network the phone will use"

    If it works just about everywhere they go, it is on Verizon. If it only works here and there, it is on Sprint or T-Mobile. The "average customer" wants to actually get a signal with the phone, so it being on Verizon is important.

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    1. You are missing the fact that with 30 roaming agreements, Tracfone's dumbphones that use Sprint or T-Mobile as their home network have almost as much coverage as the ones that use Verizon as their home network. Tracfone sells phones based on your zip code, so they often pick the network for the customer. They probably pick the network that costs them the least amount of money when there is a choice of coverage.

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    2. TracFone has never offered Sprint based feature phones.

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    3. Thanks. I should have typed 'AT&T or T-Mobile.'

      Delete
  15. Looks like they're back from the dead!

    https://www.prepayrefill.com/

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    1. Yes, under new ownership and not completely operational yet. Most airtime is out of stock. I wish the new owners well and hope they will be able to offer discounts.

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  16. Some people upset at the way things are transitioning - see last few pages of this thread:

    http://www.howardforums.com/showthread.php/1850745-Page-Plus-Refills-and-really-cheap-activations

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  17. Until Tracfone lowers their prices due to cutting out the small man, they will lose further customers! They try bringing, adding new customers back to their service by offering a few deals on HSN.com but their website refill will have to reflect their savings because most people coming to Tracfone do their homework and will not stand keeping prices at the same level! Customer service goes a long way and keeping people on the phone for long periods just because you can't update the computers your CS uses is horrible and people have come to expect fast service in the modern world!

    If Tracfone wants to continue to die, just keep your current business objective and how you treat your customers the same way! YOU'LL LEARN, . . . . . EVENTUALLY!!!

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  18. This is all because Tracfone is opening its own stores. Tracfone is just cutting out the middle man. Now those commissions are going to the customers as discounts. i was surprised to see a store in miami and i mentioned this article and it all started making sense.

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  19. I wonder if tracfone will stop being greedy and will pay the 12% on page plus refills to dealers again.

    ReplyDelete
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