Two days after halting sales and production of the Galaxy Note7, Samsung announced a second recall of the phones with exploding batteries, along with a $100 incentive for users who turn them in.
The Samsung Galaxy Note7 saga continued Thursday, as the company and the US Consumer Product Safety Commission issued a second, expanded recall on all original and replacement Note7 phones. The company also upped their original incentive of a $25 credit for returning the phone to $100.
The updated recall comes after Samsung officially ended sales and production of the Galaxy Note7 on Tuesday. It also followed reports of replacement Galaxy Note7s overheating in a similar way to what users first reported when the battery issue started, shortly after the phone launched in August.
"As a sign of our appreciation for your patience and loyalty, we are offering up to a $100 bill credit from select carrier or retail outlets if you exchange your Galaxy Note7 for another Samsung smartphone, less any incentive credits already received," according to Samsung's official recall page.
If you've already exchanged your Note7 and received the $25 credit Samsung originally offered for turning it in, you can still receive a $75 bill credit in addition from certain carrier or retail outlets, the recall stated.
"The $100 incentive to exchange the Note 7 for another Samsung device is a wise move, which can help them keep some of their customers brand loyal," said JP Gownder, a vice president and principal analyst with Forrester. "But Samsung still has to convince many people that the Note 7's problems were isolated to that model. The bigger question is whether the Note 7 debacle will have a negative effect on people's perceptions of the Samsung brand overall."
While there is no evidence that Samsung has widespread quality problems outside the Note7, the brand itself has still been sullied by the phone debacle, Gownder said. "Still, the incentive program is a smart move to try to keep customers affected by the recall in the Samsung family," he added.
According to the updated recall, in the US alone, Samsung received 96 reports of batteries in Note7 phones overheating. This includes 23 new reports since the original recall on September 15.
The company also received 13 reports of burns and 47 reports of property damage caused by the Note7 phones, the recall stated.
If you bought your Note7 from a retailer or carrier, you can return it there. But if you bought it through Samsung directly, you must follow a five-step process that involves safety gloves and three different types of boxes. You also must send the phones via ground transportation, as they cannot be shipped by air.
In the US, FedEx and UPS will only transport the phones in the special battery-safe boxes, and will only ship them on the ground, reported Charlie Osborne of ZDNet. The UK's Royal Mail service is refusing to transport the recalled phones, no matter what box they are in.
At first, things didn't look so bad for Samsung—even after the September recall, on October 7 the company's stocks opened at an all-time historic high. But on Tuesday, after Samsung stopped Galaxy Note7 sales and production, its shares dropped 8%.
On Wednesday, Samsung released its revised earnings guidance for Q3, revealing a cut of $2.3 billion from its operating profit, and $1.8 billion from its sales.
Meanwhile, Apple's stock jumped 2.3% this week, to its highest amount since December.
You can find Galaxy Note7 refund instructions here.
The 3 big takeaways for TechRepublic readers
- On Thursday, Samsung issued an updated recall on all original and replacement Galaxy Note7 devices, after reports of exploding batteries in both sets of smartphones.
- Samsung increased its incentive credit for turning in the phones from $25 to $100, in a move that some experts say might help keep customers loyal to the brand.
- In order to return the Note7s purchased through Samsung directly, users must undergo a five-step process.
- US government officially recalls Samsung Galaxy Note7 over battery concerns (TechRepublic)
- Samsung cuts profit forecast by $2.3 billion after Galaxy Note 7 saga(ZDNet)
- Galaxy Note 7, RIP. Samsung, you've got to rebuild the trust (CNET)
- Who's benefitting from the Samsung Galaxy Note 7 meltdown? (ZDNet)
- Samsung's crazy return kit for the Galaxy Note 7 may scare you (CNET)