O2 and iPhone 3G: Where ‘first come first served’ is a lie 

12 July 2008 tbs.pm/920

Of course, as everyone might expect, there was enormous demand for the iPhone 3G when it came out earlier in the week: it’s obviously an excellent product with several of the features that people wanted added to the new model.

I’m an existing O2 iPhone customer, and very kindly O2 gave us the opportunity to register our interest: as a result I received a text message when the phones became available, so I could go on-line and order one. The deal for existing customers was available until October 11.

So far, so good. But then it all started to go pear-shaped. I was teaching in Greece at the time, with the benefit of an excellent internet connection and I logged into the site, got my customer number from my on-line bill and filled in the order form. It took all the details, including credit card, and I pressed the button.

Next thing I saw was a page telling me an error had occurred, and please try again.

I did so, which was quick and easy as the cache held most of my data. Again it failed.

It was obvious what was going on: there was a huge demand – bigger than anyone had expected – and the system was simply clogged up. But the O2 site didn’t tell you that: it just encouraged you to try again. And indeed I tried again a great many times, on the 7th and every subsequent day until the on-line order page was removed, to be replaced by an “out of stock” banner. I reckon I tried around 250 times in all. A great many people have had the same or a similar experience: see here and here and here for example.

On my return to the UK I called O2 Customer Service and eventually got through to a very distant-sounding gentleman in Glasgow. I told him that I had had all this trouble, and that I understood there was unprecedented demand. I didn’t mind that I won’t get it for a while, I told him; but can I place an order – which I had been trying to do but had been foiled by their web site failure – and thus get in the queue to receive one? The answer was no: they were being allocated on a “strictly first come, first served basis” and as they were not currently available they couldn’t let me order one.

In what sense, I asked, was stopping me placing an order for a back-ordered product, “first come, first served”? Well, I was told, it was company policy not to accept back-orders for the iPhone 3G, even though that is a perfectly normal activity for a supplier. Usually a seller will rather like the idea of potential customers – especially ones who are prepared to put their money down in advance of the product actually becoming available. There’s nothing like a full order-book.

Not so for O2, however, it would appear. So what was I supposed to do? I was told that availability would be notified on the web site and to keep checking back. I pointed out that this was not in any sense “first come, first served” – it was in fact a lottery.

In addition, I had been made an offer by the company and, due to the failure of its facilities, which is their problem and not mine, I had been prevented from taking advantage of this offer. The obvious answer was to let me place the order another way, as I had done everything that was required of me to place the order. They were, in fact, by not allowing me to do so, in breach of contract.

Needless to say, this didn’t go down very well. We went round and round for a few minutes, with this guy trying to persuade me that “first come, first served” actually meant the same as a lottery in which if you happened to see the notification on the web site you could order an iPhone upgrade, with luck before the October deadline. But this didn’t mean I would be able to order one before the expiration of the offer, even though I had done all I was told was required to do so – except actually place the order, which was their fault and not mine. Eventually I gave up.

I thought it might be worth seeing what the score was at my nearest O2 store and called them. He gave me essentially the same story, using this false “first come, first served” phrase liberally again. Again I pointed out that what he was proposing – they would have signs in the window when they next had an allocation of iPhones and I could come in if I happened to pass by at that moment and order one then – was in fact a lottery.

He told me that all staff had been sent emails by head office that threatened investigation and dismissal if any member of staff was found taking details of potential customers with a view to putting them on a list – which of course would be how to offer “first come, first served”. Presumably this now-common phrase was included in the emails sent to employees. He wouldn’t send me a copy, of course, but if you can, then email relen [at] transdiffusion.org.

Evidently O2 is taking advantage of its monopoly position to save it a tiny bit of effort. If it really wanted to offer “first come, first served”, this simple two-step process is what it would do:

  • Allow customers to place an order whenever they like, creating a “first come, first served” back-order queue for each store, including the online one, just like any company does for a back-ordered product.
  • Every time a shipment of iPhones comes in, make an allocation to stores, including the online store, in proportion to the number of original iPhones sold (for example).

Thus existing customers have the opportunity to order a unit before the deadline, for example, if they choose to, and all customers get a unit in the order in which their order was placed.

That is true “first come, first served”, as opposed to the current lottery, which puts O2, in my humble non-legal opinion, in breach of contract – at least with existing customers. Anyone planning a class-action lawsuit, count me in.

A Transdiffusion Presentation

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Richard G Elen Contact More by me