A New “Guaranteed Buyback” Program Gives Consumer's Cash Back Upon Trade-In of Used Gadgets – Good Deal or Not?
A new company in Los Angeles has started a program that gives consumer's the option to purchase a "guaranteed buyback" on any type of consumer electronic gadget. The company says that this will help the consumer electronic device recycling initiative, as well as put some money back into your pocket. Sounds good at first glance, but is it really a good deal for you?
I decided to take an in-depth look at this new guaranteed buyback program which was recently started by a company called TechForward. The program that they have developed is pretty simple - you buy an electronic gadget from the store, lets say an iPod, and the store gives you the option to purchase a guaranteed buyback for the iPod which is a guaranteed amount of money paid to you when you're ready to upgrade and you want to get rid of your current iPod. You pay an upfront fee when you originally purchase the electronic device which varies with the type of gadget that it is. Lets say 2 years down the line, you want to upgrade to a newer iPod. TechForward will mail you a box and free shipping postage so that you can ship out the old iPod, and you then receive a check in the mail from TechForward for the amount that was predetermined when you originally bought the iPod. Sounds like an environmentally friendly and convenient way to dispose of out-dated consumer electronic devices, and it may be, but when you take a look at the numbers, it just doesn't add up.
When you take a look at the details of the guaranteed buyback program, you begin to see where it may not be that great of a deal for you as a consumer. For instance, in order for you to get the full guaranteed buyback value, your electronic device must be in "good condition". If it's in "poor condition" you will receive a 25% penalty, and thus receive less money back. If your device is not working at all, don't expect to see any money back. Another problem with the guaranteed buyback program is that it seems to only be valid for up to 24 months from the date of purchase. At that time you can purchase another buyback guarantee, but the new buyback figures will be much less than the original amounts.
Lets take a look at 3 examples of popular consumer electronic devices to see how the guaranteed buyback values compare to what you could expect to receive if you sold your device on Ebay instead. Keep in mind that I'm assuming that these devices are all in "good condition". The 3 products that I've chosen for this test include:
Apple MacBook Pro with a 2.4 GHz Core 2 Duo processor and 1024 MB of RAM.
Apple iPod 80 GB or higher in the black casing (color of the iPod effects buyback amount!)
Sony 60 inch LCD 1080p HD flat panel TV.
Take a look at the screenshot of the MacBook buyback figures first. You can see that it would initially cost you $69 to purchase the guaranteed buyback option, and the buyback amount varies from $690 down to $560. A similar MacBook Pro can be seen being sold for over twice these amounts on Ebay (see the screenshot). In this case, I would estimate that you would get about $1,000 more by selling this laptop on Ebay rather than taking advantage of the guaranteed buyback option.
The 80GB Apple iPod example shows a guaranteed buyback value of between $50 and $20, and an initial cost of $9. In contrast, the average Ebay auction for a used, black 80GB iPod showed selling prices of over $150. You'd get over $100 more by selling on Ebay in this case.
My final example is the big ticket item. You finally decided to splurge on that big screen HDTV and you decide to go with a 60 inch 1080p HDTV from Sony. The guaranteed buyback option would carry an initial cost of $59 when you bought the TV, and the buyback values would range from $620 down to $340 two years after the initial purchase. On Ebay I found only a few auctions that closely matched the criteria, but selling prices varied greatly depending upon what Sony model was up for sale. I saw prices that ranged from $600 (with 5 hours left in the auction) up to $2500 "buy it now" prices. So, I would say a good average selling price is around $1,000-$1,500 for a 60 inch Sony on Ebay (these were lower-end models and not the brand new flat panel HDTVs). This selling price is still much more than you would get from the guaranteed buyback option, although it may be a little tough to find a buyer on Ebay because of the difficulty of shipping such a large, fragile item - you may need to only accept bids from people who can actually come pick-up the TV.
In conclusion, it seems that the new guaranteed buyback program from TechForward may not be that great of a deal. It does have its positive aspects such as they will "dispose" or reuse the device that you're getting rid of, so it does help the environment. Also, some larger items, such as the Sony big-screen TV, can be difficult to resell on your own sometimes, and TechForward will allow you to ship the item for free and give you a guaranteed amount of money for it. So I guess it's a convenient service that some may find useful, but if you value your money at all, you should avoid the guaranteed buyback option and try to sell your items on your own instead.
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