Do Electronics Buy Back Programs Make Sense?
Will buying back your old gear save you money at the end?
Feb. 11, 2011— -- One of the hottest commercials in the Super Bowl was Justin Bieber's Best Buy spot about buying back your old gear.
Best Buy's Buy Back plan seems like a pretty good deal: guaranteed rates for the purchase of your electronics after you've used them for six months all the way through four years.
The premise is that for early adopters or frequent purchasers a guaranteed buy back makes sense, but given the complexity of the plan's structure, this may not be the best way to recoup the cost of your beloved tech purchases.
The plan applies to cell phones, TVs, Laptops and Tablets like the iPad.
You pay to enroll and the costs vary based on the cost of the product.
The longer you keep the product the lower the percentage of its original value you can get back.
The percentages are the most you can get back if your product is in pristine condition and you don't get cash back, you get a Best Buy Gift card that you can apply to purchases in the store or online.
Program Costs
Enrolling in the TV Buy Back Plan:
$60 for TVs that cost less than $500
$100 for sets priced at $500 to $1,199.99
$180 for models that cost $1,200 to $2,499.99
$350 for TVs priced between $2,500 and $5,000
Enrolling in the Phone Plan:
$60 to buy in for phones over $350 (retail price, not subsidized price)
$40 for phones under $350
Enrolling in the Laptop Netbook or Tablet plan: $69.99
Percentage Return:
0 - 6 months: get up to 50 percent of your purchase price
6 - 12 months: get up to 40 percent of your purchase price
12 - 18 months: get up to 30 percent of your purchase price
18 - 24 months get up to 20 percent of your purchase price
For TVs only, redeem your buy back within 48 months from purchase effective date and get up to 10 percent.
Consumer Reports ran the numbers with a hypothetical purchase of a 2009 TV.
If they purchased a 46-inch Samsung LCD TV (UN46B6000) in Dec. 2009 for $1,600, they would have paid $180 to enroll in the Buy Back program.
If they tried to return it today if the TV was in good condition:
Best Case: they'd get $480 back
Worst Case: $240.
Don't forget to subtract $180 for the cost of the plan. The total value back = $300- $60.
Consumer Reports checked to see what the same TV was selling for in second-hand channels:
On Craigslist : $650
On Ebay: $500 - $1,000 (Shipping for these TVs can cost well over $100 so factor that in)
Buy Backs for Phones
For phones, this program is a little more complicated.
The buy back is based not on the subsidized price you paid for the phone when you signed up for that two-year contract, but on the unsubsidized cost of replacing the phone or buying it out of contract.
So I used my own phone as an example.
I bought the iPhone 4 when it came out last summer for $199 (contract price).
If I wanted to switch over to Verizon now and had hypothetically paid $60 to enroll in the Best Buy program when I bought the phone, I would net $179.
It seems pretty good until you compare the current buy back and trade in offers available: eBay will give me $344 (limited time iPhone promotion through their instant offer program).
Radio Shack offered me $280 and the online trade in service Gazelle offered $275 (and they pay the postage).
But there are scenarios where the Verizon buy back program makes sense and the obvious one to me is a purchase of the iPad.
Apple's iPad
There are tons of rumors that Apple will come out with the iPad 2 later this year, so if you really want an iPad now, enrolling in the Best Buy program makes sense.
If you bought an iPad 16GB Wi-Fi/3G, it would cost you $599.
You pay the $70 buy back fee, and in 6 months if you want the new iPad Best Buy gives you $300 back- $70: $230 for your new iPad.
Current rates for an iPad on Gazelle are about $289.
But this is a case where the guarantee makes sense: there could be considerable fluctuations in resale price since we don't know what the iPad 2 will offer.
If it's super-fantastic and makes the old iPad look archaic, the guaranteed price from Best Buy is a good deal for consumers.
Another case for the Best Buy program is the ease of it.
A Best Buy spokesperson says their research shows that only 12 percent of people actually use trade-in programs like Gazelle.com, or resell tech on eBay or Craigslist.
And they tell us: "We can't guarantee that we'll always beat what you could get if you resold the product on your own. But at Best Buy, we will always give you the higher of the Buy Back price or our own trade-in program's value when your product is returned in good condition with all of its originally included parts. With the Buy Back Program, we'll buy the product back, at a price that provides you huge value to move to the next product of your choice."
So if you think this is the only way you would ever get some money back for your gear, then it's a good deal for you and your lifestyle.
If you look at the numbers a different way I welcome your thoughts in the comments section -- there are a lot of scenarios here and there may be other ways in which the Best Buy Back is a good deal.