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“The low-priced multiple lines is how these companies lure you in,” she said. “The consumer focuses on the $9.99 per line cost. The company looks at the upcharges — insurance fees, data plan costs, extras for features. Those add-ons are highly profitable. From their standpoint, the more people on the plan — locked in with a contract — the better.”
Phone companies also use family plans to lessen turnover and create lifetime customers.
“Consumers develop loyalty to brands,” she said. “The companies hope kids that start on these family plans will be with them into adulthood, then stick with them when they select their own family plan.”
But it’s not all about marketing. Vitorino sees larger shifts in society. A provision in the Affordable Care Act that allows parents to keep children on their health insurance until they are 26 may exert a subtle influence on families.
“Consumers carry concepts from one product or service to the next,” Vitorino said. “If the government says you can be responsible for your child for one thing until they are 26, that may give parents license to apply the concept to other services. There is the notion for the kids to be with you longer. There’s one change in society and others follow.”
Parents who wonder if the kids will ever go it alone might be heartened to hear about Jill Smith.
Smith and her husband, Jason, both 32, have added her parents to their family plan.
“It was our idea,” said Smith, of Crystal. “They reimburse us for their lines. They don’t text, they don’t have a data plan, so they’re cheap to carry. After all they have done for us, it’s nice to know that we can bring down expenses for them.”
Kevyn Burger is a Minneapolis-based broadcaster, podcaster and freelance writer.