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Why Google Is Issuing Refunds to Pixel 2 Buyers

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Entry-level Pixel 2 starts at $649

Alphabet’s (GOOGL) Google is refunding certain purchasers of its flagship Pixel 2 smartphones, which were launched on October 4 and went on sale a few weeks later.

The Pixel 2 smartphone comes in two versions—Pixel 2 and Pixel 2 XL—where the Pixel 2 XL is the high-end model with a recommended starting retail price of $849. The entry-level Pixel 2 carries a recommended retail price of $649.

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Google apologizes for price discrepancy

The refund that Google is issuing is tied to overcharging some customers at certain stores. According to the Verge, a Manhattan pop-up store run by an authorized Verizon (VZ) reseller charged customers $680 for the entry-level Pixel 2 instead of the recommended $649. For the Pixel 2 XL, the store charged customers $880 instead of the recommended $849.

As a result, the Manhattan Verizon reseller marked up prices of both Pixel 2 models by $30. A pop-up store in Los Angeles was also reported to have overcharged Pixel 2 buyers. Verizon is one of the two leading US (SPY) wireless carriers by subscriber base.

Google responded to the overcharging claims, identifying the incident as an error. The company apologized for the pricing confusion and added that it would reimburse customers impacted by the price discrepancy.

Taking on market leaders

The Pixel 2 smartphones feature sleeker designs and technology upgrades over the original Pixel, which was released in 2016. Google has positioned its Pixel 2 smartphones as competitors to the flagship handsets from Apple (AAPL) and Samsung (SSNLF), the world’s leading smartphone vendors.

According to IDC, Samsung accounted for 23.3% of smartphones shipped worldwide in 2Q17, while Apple accounted for 12% of global smartphone shipments in the same quarter. The chart above shows the world’s top five smartphone vendors by market share in 2Q17.

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