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Consumerist says:

Molly just bought an iPhone 3G, only to find out Monday that Apple would be releasing a better, faster, more compass-y phone, the iPhone 3 G S, June 19. She had two options - keep the suddenly not-so-new-seeming iPhone 3G while pining for the newer, hotter model, or head to the AT&T store and regulate.

She chose the latter:

I checked with my local AT&T store - I had my receipt in hand and told the person what happened and he told me I had two options: $100 credited to my account, or I could put my name on the wait list for the day the 3GS comes out and exchange my current phone for the 3GS one - the only charge I would get is a $20 restocking fee. The money gets reserved on my credit card, and the day it gets shipped to the store my card will get charged the 199+tax, but the day I bring back the old one I get 179+tax credited to that card.

For $20 and a better phone, I thought this seemed fair so I did the exchange. They told me they will call me when my phone comes in and I have 7 days from then to pick it up. Apparently this must be something they were prepared for, because this guy didn't even have to fumble around for 20 minutes looking up protocol.

I was really surprised by their level of support, as when I was with Verizon for 8 years, if something (anything, really) happened, it took an hour for them to figure out what to do or how to solve the issue.

And Molly didn't need any magical powers of persuasion pull off this epic win. Turns out it's AT&T policy to provide such hook-ups for those who have bought iPhones since May 9, SFGate reports:

On the pricing front, Smith said AT&T has extended its one-month price protections for recent 3G purchasers to May 9 so iPhone 3G users who bought their phones that day or later can still turn it in and get the new iPhone 3G S for the same price on June 19. To qualify for this extended return policy, customers will need to visit an AT&T retail store and pre-order iPhone 3G S between June 8 and by June 18.

To wrap things up, an AT&T rep Elanor writes in to spell out the situation and tell angry customers to chill out:

Just to let your readers know, if any of them happened to purchase an iphone 3g recently (between May 9 and May 19) and are now kicking themselves for not waiting:

If they go to an AT&T store and pre-order the new 3GS (before June 18), AT&T will exchange their device for them with no penalties besides a 10% restocking fee. Yeah, the restocking fee sucks, but at least you get the benefit of not having to sign *another* contract and you get the new phone you missed by a month with no other penalties! Yay new phone!

Also, anyone who bought a 3G iphone and isn't interested in an exchange for the new model, but would like a credit due to them lowering the price has until June 14th (if they purchased after May 9th) to go to an AT&T store and ask for a credit for the difference. So if they bought the 8gb 3G for $199 they'll get a $100 credit on their bill for the new price difference. They only have until June 14th for this though!

I am an AT&T CSR please post this so people calm the hell down! And please also keep in mind - Apple and AT&T subsidized upgrading last time around and they /just now/ released information - the phone isn't due out for two weeks, they may change their mind in the meantime, be patient!

Just to let your readers know, if any of them happened to purchase an iphone 3g recently (between May 9 and May 19) and are now kicking themselves for not waiting:

If they go to an AT&T store and pre-order the new 3GS (before June 18), AT&T will exchange their device for them with no penalties besides a 10% restocking fee. Yeah, the restocking fee sucks, but at least you get the benefit of not having to sign *another* contract and you get the new phone you missed by a month with no other penalties! Yay new phone

I didn't say in line...just about 30 mins in and out. Get it activated etc.

GOD GREG DO SOME RESEARCH