Excerpt from Economic Times Article, Published on Jan 03, 2024

Samsung, a prominent player in the smartphone industry, faces scrutiny over its ongoing upgrade offer as mobile phone retailers raise concerns about potential malpractices that expose them to regulatory compliance risks. Despite the lack of response from Samsung to ET’s queries, the company has taken corrective actions in its scheme.

In an attempt to address the issues highlighted by retailers, Samsung has modified its scheme letter for January. The updated version no longer places the responsibility of handling old devices on retailers. Instead, the company has provided a specific list of devices eligible for the upgrade, alleviating the burden on retailers to manage the trade-in process themselves.

The controversy stems from the “smart upgrade offer,” which retailers claim not only compromises customer privacy but also shifts the burden of any wrongdoing onto them. As per the scheme’s clauses, retailers are instructed to engage in the trade of used mobiles collected through the exchange offer. However, industry insiders reveal that Samsung’s in-store representatives often bypass physically obtaining the old handsets and simply upload the IMEI numbers onto the company’s database to prevent misuse of the scheme.

Despite assertions from industry executives that the scheme doesn’t necessitate handing over old devices to Samsung, the confusion persists, leading to concerns about potential risks faced by retailers. The All India Mobile Retailers Association has raised red flags, expressing worries that the discrepancy in the scheme’s implementation could result in regulatory issues, particularly regarding GST, and might be referenced in investigations by statutory authorities.

Exchange offers, like the one in question, have significantly contributed to the growth of premium smartphones in India, according to market trackers. However, the disconnect between the actual processes and the outlined procedures in Samsung’s upgrade scheme remains a focal point of contention among retailers.

Samsung’s efforts to address these concerns by revising the scheme underscore the importance of aligning with regulatory compliance and maintaining transparency in exchange programs. As the debate unfolds, the tech giant faces the challenge of balancing its promotional offers with ensuring adherence to industry regulations and safeguarding the interests of retailers and customers alike.

To delve deeper into this topic, please read the full article on Economic Times