June 21, 2013 — -- If you own an iPhone 4 or iPhone 4S, a free iPhone 5 is just a car ride away for the next week.
On June 1, Best Buy offered a one-day deal: bring in your old iPhone 4 or 4s and trade it for a brand new iPhone 5. The offer was so successful, that the retailer has decided to give it another, longer run.
For the next nine days, you will be able to bring in those iPhone models and trade them in for the newest Apple phone. The offer ends Saturday, June 29.
"We're seeing increasing interest from our customers and within the consumer electronics industry when it comes to trade-in," Best Buy said in a statement. "Many consumers don't know they can trade in their old stuff and get a gift card to put toward upgrading to the latest and greatest in technology." Best Buy offers a trade-in program for other electronics and smartphones as well.
The free phone deal is a result of two ongoing promotions happening at Best Buy right now. In May, the store began offering any iPhone with a two-year contract for $50 off, bringing the iPhone 5's usual $199.99 price down to $149.99. Now when a customer brings in an iPhone 4 or 4S they will get a $150 trade-in credit, making the iPhone 5 free.
But there are some caveats. Customers have to be eligible for an upgrade at Verizon, AT&T and Sprint (no T-Mobile) to get the offer and they will have to pay the carrier activation fees and sales tax. The credit can't be used towards a different phone and the deal is only offered at physical Best Buy or Best Buy Mobile locations.
The trade-in device has to be in working condition to get the deal. Phones that are broken or cracked will not be eligible.
Gazelle, a consumer electronics trade-in website, does accept broken phones, however. "Gazelle also offers up to $100 cash for broken iPhone 4 and 4S models, which is not an option with the Best Buy promotion," Gazelle CEO Israel Ganot told ABC News.
However, Best Buy does say that if a customer's iPhone 4 or 4S is worth more than the $149.99 price of the iPhone 5, they will "receive the positive difference in the form of a Best Buy gift card in addition to a free iPhone 5."
So what happens to your trade-in? Best Buy says the phones will be recycled or refurbished and sold through secondary channels. Before customers trade in phones, they should be sure to reset the device back to factory settings.
Phone trade-ins have become a booming business as users look to upgrade every year or two. Gazelle has built a $100 million business on Apple product trade-ins. Prior to the launch of the iPhone 5, the site received 1.2 million price quotes for iPhones from people who were considering selling their phones ahead of the launch.
Apple itself is said to be planning its own iPhone trade-in program. Bloomberg News reported early this month that Apple will launch a program in partnership with Brightstar, a mobile phone distributor. The service would allow iPhone owners to trade in their phones for a discount on new phones.
Apple may launch a new iPhone – presumably the iPhone 5S – later this year. The company showed off its new iOS 7 software at an event last week. And that might be one of the main reasons for the Best Buy deal right now.
"Given the tie-in of the program to purchase of an iPhone 5, their primary motivation seems to be to drive sales of new iPhones by increasing their affordability and to drive people into their stores," Ganot said. "With the current timing, this may be in part a move to drive new sales in a period when consumers might otherwise hold out on upgrading until the new iPhone is released, which is rumored to be in the fall."