Well, that way they are still spending $30 extra a month.
I can't see any other option than paying $800.
(I went from $65 a month to $30 a month when I got the note 2 so I didn't mind paying $700 for the phone - I "break even" in a year). Considering you are already on $40 a month I can see how $800 is a lot.
If you went with an upgrade, what would your monthly bill change to?
Not eligible for a upgrade until late 2013
But if I upgrade I lose unlimited 4g with Verizon