RedSpeed Blog
Exit Fees and the 'Was/Now' Price Trick, Explained
Exit fees are usually a payout of what you already owe, not a punishment. 'Was/now' pricing is a different problem entirely — and it's designed to make a discount look bigger than it is.
Short answer: an exit fee is usually just what you already owe, paid out early. A "was/now" price is a marketing device that can make an ordinary price look like a bargain — and it's worth knowing the difference.
How is an exit fee actually worked out?
Most contract plans bundle two things into your monthly payment: the service itself, and a subsidy — often for a device, sometimes just a lower advertised rate in exchange for commitment. When you leave early, the provider pro-rates what's left of that subsidy across your remaining months and asks you to pay it out in one go.
It's not usually an arbitrary penalty. It's closer to paying off the rest of an interest-free loan early. That doesn't make it painless, but it does make it predictable if you actually read the contract terms before signing.
What's the "was/now" pricing trick?
It's a common retail tactic: show a higher "was" price crossed out next to the real "now" price, so the discount looks bigger than it is. The trick works when the "was" price wasn't really the standard price for very long, or ever — it exists mainly to make the markdown look impressive.
In telco specifically, this shows up as a plan advertised at a steep "discount" off a rate that's rarely, if ever, the price anyone actually pays. The "now" price might be perfectly reasonable — the issue is the anchor next to it is doing more marketing than informing.
How do you tell if a discount is real?
A few questions cut through it quickly:
- Was the "was" price ever actually charged to real customers, or does it only exist as a crossed-out number?
- Is the "discount" permanent, or does the price jump back up after an introductory period?
- Would the "now" price still look reasonable without the "was" price sitting next to it?
If a plan only looks good because of what it's being compared to, that's worth noticing.
What does transparent pricing look like instead?
One number, no asterisk, no inflated reference price above it. RedSpeed's personal mobile and NBN plans are priced this way — what's shown is what you pay, this month and next, without a "was" price doing any of the persuading.
That's a smaller thing than an exit fee, but it's the same underlying idea: know what you're actually being asked to pay, and why.
Common questions
Is a 'was' price always real?
Not always. Some providers set a plan at a high 'was' price it was rarely, if ever, actually sold at, purely to make the 'now' price look like a bigger discount.
What happens if I cancel a contract plan mid-term?
You'll typically owe a pro-rated payout of the remaining device subsidy and/or minimum spend on the contract — that's the exit fee.
Does RedSpeed use 'was/now' pricing?
No — personal mobile and NBN plan prices are shown as what you'll actually pay, with no inflated reference price above them.