Doing Business | IT & Technologies

October 13, 2016

Samsung to Note 7 owners: Here's an extra $100 for your phone

The Consumer Product Safety Commission issues an official recall notice, and Samsung throws in a $100 credit to encourage people to turn in their phones.
Samsung Galaxy Note 7

Samsung Galaxy Note 7

Samsung really, really wants you to turn in your Galaxy Note 7.

The Korean electronics titan said it would give $100 in bill credits to customers who turn in their Note 7 for another Samsung phone.

The offer comes after Samsung and the US Consumer Product Safety Commission once again issued a recall for the Galaxy Note 7 -- even if it's a replacement unit. Two days earlier, Samsung confirmed that it had killed off the Note 7 and warned consumers to power down and turn in their phones.

"The Galaxy Note 7 recall has proven to be a real challenge for Samsung. I am very concerned that consumers who exchanged their phones for replacement Galaxy Note 7s are now at risk again," wrote CPSC Chairman Elliot Kaye in a statement.

The extra financial incentive serves three purposes: It's a token gesture meant to soften the blow of the second recall for its most loyal customers; it's an incentive to convince stubborn superfans who have opted to take the risk and keep them; it's also a way to keep them using a Samsung device.

The second recall marks the latest chapter in the nightmare saga that is the exploding Galaxy Note 7. Samsung moved quickly to recall the first batch of Note 7 phones, only to encounter incidents in which the supposedly safer replacement phones began to catch fire as well. The company has already warned the debacle will cost $2.3 billion in lost operating profits, but the bigger damage will be to its brand and credibility.

To date, according to the CPSC, Samsung has received 96 reports of Galaxy Note 7 phones overheating in the US -- 23 more than it had since the original recall on September 15 -- including 13 reports of burns and 47 reports of property damage, according to the agency.

"We appreciate the patience of our consumers, carrier and retail partners for carrying the burden during these challenging times," said Tim Baxter, president and chief operating officer of Samsung Electronics America. "We are committed to doing everything we can to make this right."

Some carriers have already given out a $25 bill credit for switching out their phone for another Samsung device, and customers who took advantage of that offer will get $75 more. Customers who opt for a full refund will get $25. Likewise, customers who switch to another brand will only get $25. All of the US carriers are offering customers the choice to swap out the device for an entirely new phone.

Samsung launched the Galaxy Note 7 at a splashy event in New York, and the critically lauded handset was set to challenge the iPhone for phone supremacy this holiday season. Users, however, quickly found that their phones would overheat and catch fire. The device was banned on planes and trains.


This second recall follows the CPSC's official recall from last month, which is said to have involved 1 million of the 2.5 million phones that were manufactured.

 

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