When Verizon iPhones officially go on sale tomorrow, millions of likely buyers will face a dilemma: How to get rid of their older model cell phones?
In the past, customers could sell used phones on Internet auction sites and on places like Craigslist. But thanks to a growing trend, the solution might be as easy as visiting a local electronics store.
So-called brick and mortar retailers are getting into the business of buying used electronics. Radio Shack is leading the way. The company will purchase used cell phones, cameras, electronic games and GPS devices. Radio Shack also operates a similar buyback program within 800 Target department stores throughout the country. Instead of cash, sellers receive a gift card for the value of the item sold.
At a Bronx, N.Y., Target store, customer Wendy Reyes traded in an older model iPod for a $55.50 gift card and now she is planning on selling other older electronics. She said, “I would definitely do it again” adding that, “they are laying around collecting dust at home.”
Radio Shack either resells the used equipment to another company that refurbishes the electronics for re-sale, or has it responsibly disposed of. Citing competitive reasons, the company will not release statistics on the success of the two-year-old program.
When asked about the impact of the Verizon iPhone, Radio Shack Division Merchandise Manager Robert Dunlap said, “Whenever you see a spike in handset sales, you see a spike in trade-in activity.” Prices for used cell phones vary, but to have any value, Dunlap said the phone must function, not have a cracked screen or water damage.
Sprint is also in the buyback business. The company began repurchasing phones from customers a decade ago. In the past two years the program has expanded, and now Sprint will purchase equipment such as iPhones, which are not sold by the company.
Morningstar analyst R.J. Hottovy says he expects to see an increase in other retailers starting buyback programs of their own. He said, “The benefit for the retailers is really keeping customers coming back to the stores.”
Chain store Best Buy announced its version of a buyback program during a Super Bowl commercial featuring rocker Ozzie Osbourne and teen sensation Justin Bieber. Unlike the program offered by Radio Shack, Best Buy will only purchase items sold by the chain and will require an upfront fee for a buyback option at the time of the initial purchase. There is, however, a one week promotion to participate in the program at no cost.