Two Companies Offer Cash, Credit for Old Gadgets

We think a lot about getting new gadgets, but not so much about getting rid of old ones. The result: old cell phones, defunct laser printers and Pentium III computers gathering dust.

A couple of companies want to help us clear out those old gadgets, while feeding our upgrade habit, helping the environment and making a buck for themselves.

Instead of being hit up for an extended warranty next time you buy a gadget, you may find yourself hearing a pitch from TechForward Inc., a Los Angeles-based company selling a "guaranteed" buyback plan for electronics.

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For a fee paid when you buy a device — $9 for an iPod, for instance — you get the right to sell it to TechForward at a predetermined price that depends on how long you keep it.

If you sell an iPod after a year, for example, you would get $40; after another year, $20.

In the financial world, this is known as a "put option" — the opportunity to sell a certain number of shares at a certain price at a certain date in exchange for an upfront fee.

But Jade Van Doren, TechForward's chief executive, said his inspiration came from traveling in Asia, where gadget worship is even more pronounced and some consumers buy new cell phones every few months.

"I just started thinking about ways that you could build a company around ... encouraging people to live that lifestyle of temporary ownership," he said.

The trade-in prices don't look competitive with eBay auctions, but TechForward offers the convenience of free packaging and shipping. Its prices assume the item is in good condition.

The company won't pay for an item that's broken, though it will supply packaging, pay for shipping and arrange to recycle it.

In addition to trades TechForward accepts from customers its retail partners sign up when they buy electronics, the company lets owners of a limited range of gadgets sign up online to participate.

So far, TechForward's partners are small West Coast retailers. They get a share of the initial fee and can count on repeat business from customers who trade in their old gadgets.

"The fact that we're helping people upgrade more quickly is beneficial to the owner of the device but also beneficial to the retailer who's trying to sell the new product," said Marc Lebovitz, TechForward's vice president of operations.

Techforward claims participating stores are selling its guarantee with 12 percent of applicable gadgets.

NEW Corp., a much larger company that runs the extended warranty programs for Best Buy Inc. and Wal-Mart Stores Inc., plans to bring a slightly idea to stores in the second quarter.

The ecoNEW program — which amounts to a vast expansion of the trade-in programs some retailers run, mainly as promotions — won't charge upfront like TechForward.

It will provide store credit for old electronics in some categories, like computers, MP3 players and smart phones — with the dollar amount depending on the market for the particular equipment when it's traded in.

Some items, like printers and non-LCD monitors, won't qualify for credit, but users will be able to send them back to NEW for free for recycling. Other items, like cell phones, aren't eligible for credit or recycling.

Dan Hulkower, vice president of client management at NEW, said the Sterling, Va.-based warranty company hopes to bring in as many types of products as possible.

"We've got the green contingent in the company screaming for this solution and to make it as altruistic as possible," Hulkower said.

The program will be offered by retailers — NEW can't yet say which — so customers will go to their Web sites or stores to return things.

With no receipt necessary, they will be able to return things bought from other stores.

Some manufacturers, like Apple Inc., Dell Inc. and Hewlett-Packard Co., run their own recycling programs, which generally rely on customers mailing in their old gear.

In September, Sony Corp. started accepting discarded electronics at some Waste Management Inc. drop-off centers.

The NEW and TechForward programs offer a new take. It's reasonably easy to resell working, high-value electronics through eBay, but it has been hard for consumers to dispose of defunct or obsolete items in an environmentally safe manner.

Just 12.5 percent of U.S. electronics waste is offered for recycling each year, according to the Environmental Protection Agency, and much of that is actually dumped rather than recycled, the EPA says.

Recycler TechTurn Inc. estimates there are 600 million to 800 million personal computers sitting unused in the U.S. They contain substantial amounts of lead, among other toxic metals.