The latest release from the Nokia N-Series line up is the Nokia N82, originally released on O2 and then Pay As You Go the N82 is now being offered with a range of free gifts when buying the handset on a pay monthly contract deals.

The free gifts available with a Nokia N82 contract deal include:

Nintendo DS Lite

Satellite Navigation

Laptop

Playstation 3

Xbox 360

Sony PSP Black / White

iPod Touch

GHD Hair Straighteners

LCD TV

The gifts are available on O2 tariffs of £50 line rental per month and above, and are sent out 28 days after the customer has made their order.

How do the retailers manage to offer these high value gifts free?

Retailers are paid a commission by the network that they connect the handset to, this is different for each tariff with the lower line rental tariffs offering smaller commissions than the more expensive ones.

The retailers then look at the amount of commission they are to receive and subtract their profit margin, the remaining amount is then made available to the customer in a variety of ways.

Customers can choose to redeem the commission as a cash back amount over a period of time and usually in set stages, or they can opt for what is known as instant cashback - a reasonably new scheme whereas the customer no longer has to wait to redeem their money but receive it with their handset (or withini seven days).

The instant cashback amount is also known as automatic cashback and will generally be lower than the cashback offer that can be redeemed.

The retailers rely on a certain percentage of the customers forgetting to claim their cashback and so can offer more for the redemption scheme than the instant.

Another way that the cash back is offered is to discount the line rental charges, but beware, this is the same cashback redemption scheme but the money the customer will receive has simply been taken off the overall line rental charge - the customer will still have to pay the full line rental charge to the network and then claim back their cash back to compensate.

Finally, the commission can be used to buy free gifts, bearing in mind that retailers are buying these goods in bulk and so at a lower rate than retail, they can then offer expensive goods like the Playstation 3 instead of a cashback amount.

The Nokia N82 is availabl enow on O2 contract deals with a vast array of free gifts, most mobile phones are now being offered with free gifts and cash back and the lower the cost of the handset the bigger the deals can be.

For some budget mobile phones there are even offers with 12 months free line rental on 12 month free contract deals, if all of the cash back is claimed by the customer they will effectively have paid no line rental charges over the contract period, in other words a free mobile phone and only the calls and services are paid for over and above the tariff allocation.