iPhone without cash?

(See revision at end of article)

So, I've heard rumors that Apple iPhones cannot be bought with cash. The rumors say that the purchase of an iPhone must be paid with check, debit, or credit card. Since when has the government rescinded the part of US cash currency that says it is “legal tender for all debts, public or private”? Take a bill out of your pocket, right now, and look at the front face. Near the top left corner you will notice several lines of small text. Read it. The last time I checked, there was only one single instance in which a person or business could refuse US tender. This instance is that more than 25 cents in pennies is not considered legal tender.

The rumor say the reason that Apple has made this policy is so that an iPhone sale can be easily traced. The intent is to prevent iPhones bought in the US from being illegally exported. While I understand their concern, it disgusts me that they are willing to enforce policies on their sellers which are totally and entirely illegal. What disgusts me worse is that their vendors actually follow the illegal policies. If I actually wanted an iPhone, I would love to go try to buy one, then sue the vendor when they refuse to take my cash. Unfortunately, I avoid supporting unethical companies and even if Apple was ethical before this (they were not, just for the record), this single act is totally unethical.

Now for the illegal export thing. Since when did a seller have any control over how a buyer uses the product he bought? How is it that our nation's laws allow a company to tell us what we are allowed to do with something that we have bought and paid for? First, this is not about software patents (although, it applies equally), this is about physical products that a US citizen has bought in the US and has sole ownership of. An Apple iPhone is such a product, just as a bag of marbles, or a pack of baseball cards is. If Apple can restrict the resale of the iPhone outside the US, then Fleer can restrict the trade and sale of the baseball cards it prints and sells. Imagine someone getting sued for trading a shooter for three steelies (marbles). Now, you may say that the marbles are just simple pieces of glass and the cards, just paper and ink, but isn't the iPhone just plastic, sand, and metal? How does making it into a more complex product suddenly give the seller rights over it, even after the seller no longer owns the product? When does a marble become so complex that the seller can restrict resale or trade of it?

Now for the root of the problem. I have an European friend that took his wife to Egypt for their honeymoon. They bought a piece of art from a street vendor while they were there. Fortunately they had hired a guide. The shop's posted price for the object was equivalent to between $25-$30 US dollars. The guide was able to secure the art work for them for only $2.50 US. This is very common in foreign countries. Foreigners are regularly charged much higher prices than the locals. Tourists often hire guides, because the local guide knows what the actual value of the merchandise is and can help the tourists get more reasonable prices. Increasing prices for foreigners is common, even in countries where haggling is not common.

In the US, it is different. Nobody in the US haggles anymore. Most stores are not run directly by the owner and the employees are not authorized to sell products for less than their marked prices. Even the small businesses that are run directly by the owner are not likely to haggle. You will probably get a strange look, or even get kicked out, if you try. Ironically, US citizens get ripped off regardless of where in the world they are. In foreign countries, we get the tourist prices, and in the US, the corporations charge much more than they need to. Want evidence of this?

Have you ever heard of an “international edition” of a book? How about region codes for DVDs? These are mechanics used primarily by US industry for ripping off US citizens. DVD region codes exist so that media producers can charge different prices in different regions of the world, without having to worry about lower priced regions selling DVDs cheap to higher priced regions (DVD players are programmed to only read DVDs from the region the player was sold in). International editions of books are printed with a warning inside the front cover stating that it is illegal to sell the book within the US. Again, the intent is to prevent to resale of the book within the US.

Now, it may seem nice that these companies are scaling prices based on the ability of people to afford the product. In reality, if the company is selling the product for $10 cheaper outside the US, they are extorting an extra $10 out of US citizens. They would not be selling the product outside the US at all if the sales were not generating profits. This means that they are tacking on an extra $10 to their profit margin, to sell the product in a location that is cheaper and easier to reach, because we can afford it. In other words, they are ripping us off. What's worse is, our own government is helping them to do it.

The fact that US law allows a company retain control over the resale of products that they have already sold is disgusting. Actually, this is playing a large part in the economic issues currently plaguing the US. Consider, the exchange rate for money is supposed to reflect the actual value of the money in the countries in question (more often than not, the exchange rate is based more on what banks are willing to trade than what the money is actually worth). If a DVD in the US costs $15 US (this is pretty common right now) and the same DVD is priced at the equivalent of $10 US in a foreign country, that will drive the value of that country's money up, at the same time as driving the value of the US dollar down. (And note that if the manufacturer adjusts prices to reflect changes in exchange rate, this effect is amplified.) Same thing with any product that is priced differently based on location. If the price is cheaper in one place than another and the currencies used are different, the value of the currency of the lower priced region will increase and the value of the currency of the higher priced region will decrease. So, not only are these companies ripping us off directly, they are lowering the value of our money indirectly. Again, our own government is helping them to do it. (Oh, and note that by refusing to accept cash tender, Apple is directly lowering the value of our currency.)

Now, I would like to see the laws that protect to people enforced. The government has been protecting businesses like Apple from minor losses for much too long. I want to see Apple get their pants sued off over this. I also would like to see every vendor that has enforced this illegal policy pay as well. If a company does not know the laws of the country they are operating in, the should not be there. Fines for everyone! (And not these puny ones, real fines, with lots of zeros. We need to start paying off the national debt.)

Lord Rybec


Ok, I am wrong. It was the iPad. Furthermore, Apple has changed their policy as a result of complaints: See article here

Still, Apple should at least get fined, as they did break the law by refusing to accept legal tender as payment.