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Comment by recoiledsnake | Hacker News Reader

If early termination fees are just ~$350, what's stopping people from doing that and selling the phone on eBay for $400? Am I missing something?

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Because the combined eBay/PayPal fees are 10%, and you also have to pay $199 for the phone.

+1 for doing all the math

In short, nothing. CNET does a nice job at explaining the early upgrade situation. http://news.cnet.com/8301-33620_3-57512788-278/for-iphone-5-...

This makes no sense, Lets say i was to get an iphone 5 keep it for 3-4 months so that is 199$ + 285$ termination fee. that makes around 485 $ , and then sell my iphone 5 for like 515 $. I would make a profit, or is there a 6 months or so no changing carrier clause. ( As i am not an american i don't know how these things work)

If you kept it for 3-4 months you would still have to pay for service during that time, making it not really worth waiting just to pay a lesser termination fee.

Do you have to give the phone back when you terminate?

If you did, that would eliminate the reason for the ETF (and also another profit point for the carrier.)

>If you did, that would eliminate the reason for the ETF.

I always figured the early termination fee is because you broke a contract. It's got nothing to do with if it costs the carrier any money, it's simply a penalty for breaking a contract.

If you can do that, why would anyone be willing to pay $400 on eBay?

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