A smartphone as a holiday gift? Not such a brilliant idea

In this week's Ask Maggie, CNET consumer advice columnist Marguerite Reardon cautions readers to think twice about giving a smartphone as a gift. Why's that? It's the gift that keeps on costing.

Before the holidays, wireless carriers slash prices on hot smartphone models -- making them a tempting buy for anyone looking for a gift. But do smartphones really make good gifts?

On Black Friday this year, retailers were offering jaw-dropping deals on some of the most sought-after smartphones on the market. For example, the latest Samsung Galaxy S5 could be had for a penny from Target. And Radio Shack was offering it for free. The LG 3 was also on sale for a penny on Amazon and free at Radio Shack.

Even Apple's iPhones, which never go on sale, were offered at discounts. The 16GB model of the iPhone 6 was $179 at Target and the older iPhone 5S was $79 at Walmart and Target.

Some of the deals even lasted beyond Black Friday, such as Amazon's 1 cent offer for the HTC One M8.

While these deals may seem too good to pass up, especially when you're looking for a splashy gift for the loved ones on your holiday list, they aren't always the smartest gift. In this edition of Ask Maggie, I explain why and offer some advice on why you may want to consider giving another gadget this holiday season.

Dear Maggie,

I'm seeing ads for terrific smartphone deals. What should I know before I decide to give one to family and friends?


Holiday Bargain Hunter

Dear Holiday Bargain Hunter,

There's no doubt you can get a great price on a new smartphone around the holidays, especially on older models. But it's a gamble -- like giving a puppy as a present. A week or so after taking Spike for a walk in an ice storm, coming home to chewed up shoes and spending hundreds on vet bills, that cute cuddly fur ball seems a lot less cute.

Carriers may be offering good deals on smartphones this holiday season, but that doesn't mean they make good gifts. James Phelan/CNET

Here are four reasons why giving a smartphone for the holidays may also be a bad idea.

1. The gift that keeps on costing: The price of the device is just a fraction of the overall cost of owning a smartphone. Monthly service charges can add up to more than $2,000 over two years, the typical length for a wireless service contract. Compare this to the $850 you'd pay for service during that same time for a traditional feature-phone plan. So be aware that new smartphone you're about to give likely comes with a 24-month contract and that breaking that contract can cost $350 in early termination fees. Of course, you can get around signing a wireless contract if you're willing to be super generous and pay full price ($600 or more) for the phone.

2. With this phone, I thee wed: Ever wonder why arranged marriages aren't popular in western culture? I'll tell you: No one wants someone else choosing their spouse. While a phone contract doesn't last as long as most marriages, it's still a commitment. When you buy a smartphone, you're buying an "ecosystem." The ecosystem is the world of mobile apps, entertainment and services that work with that phone. If you buy an Apple iPhone, for instance, you're tied to Apple's App Store and iOS software. With a Samsung phone, you're tying the knot with apps, etc. that work with Google's Android software. Again, something to keep in mind.

3. Breaking up is hard to do: Most mobile phones in the US don't work on other wireless services. While some "unlocked" phones designed for GSM networks will work on US carriers, such as T-Mobile and AT&T, they probably won't work on Verizon or Sprint. Verizon and Sprint phones may not be activated on other US networks. And even if they can, the services may be limited. This means that even if you bought your mother-in-law's new iPhone at full price, chances are she won't be able to switch carriers.

4. That'll be $35, please, to return your gift: You may love the new Samsung Galaxy Note you bought your dad, but he may hate it. Unlike other items, which are relatively easy to return after the holidays, smartphone returns can be tricky. Almost every major US carrier charges a restocking fee of about $35. What's more, carriers also require returns within 14 days of purchase if you want to avoid paying that early termination fee. Return windows may be extended around the holidays. Check first.

Bottom Line: Don't be tempted by low prices. Buying a smartphone is best left to the person using it. My advice: only give a smartphone as a gift if you're prepared to pay the service and other fees -- and if you know for certain the phone and service provider you picked work for your gift recipient. If you're not certain, check out CNET's gift guide for other ideas that may appeal to the gadget lovers on your holiday list.

Ask Maggie answers readers' wireless and broadband questions. If you have a question, send me an e-mail at Please put "Ask Maggie" in the subject header. You can also follow me on Facebook on my Ask Maggie page.