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Proceed with Caution before Investing in Technology Buy-Back Programs
To keep up with the blinding speed of advancing technology, many consumers opt for technology “buy-back” programs when they purchase high-tech gadgets. These involve a one-time fee at the time of purchase. Are they are good idea for everyone?
The item must be turned in within a specified period - typically six months from the time of purchase. However, the plan usually comes into effect one month after purchase. If a consumer waits too long, the buy-back discount drops from 50 percent to 40 percent, and then 30 percent within days of that deadline. With that in mind, as is the case with extended warranties, some consumers may not get their money’s worth from buy-back programs.
Connecticut Better Business Bureau recommends considering the pros and cons of these programs before shelling out extra money at purchase with the goal of making a discounted trade-in at a later date:
Gadget buy-backs are not ideal for the disorganized - If you haven’t saved your original receipts, power cords and manuals, you could lose money on the deal or your payout could be less than expected. Most buy-back programs insist that the original items and accessories be brought back to the store at the time of the exchange.
Buy-back programs can provide a sense of insurance on your product - Buy-back programs essentially guarantee a resale value, meaning they act as insurance against loss of value. But like any insurance policy, its true value can become nominal and hard to define. Before enrolling in a buy-back program, make sure to read the fine print. Many buy-back options have conditions and constraints that could ultimately keep you from being able to sell back your used gadget.
You may get more for your electronic gadgets elsewhere - Many consumers use sites like eBay and Craigslist to sell their used electronics. In many instances you will get more money for your electronics by using these sites than opting for a retailer’s buy-back program.
Mobile phone contracts are not covered - When you purchase a new phone and add the retailer’s buy-back program, keep in mind that when you sell your phone back to the retailer, your wireless provider will continue billing for the duration of your contract. In addition, you get only half the unsubsidized price. Your upgraded phone will also be unsubsidized and quite expensive, so, in the case of a smart phone, that means you are paying around $350 to get the latest phone every six months.
Remember that the interest of the retailer is usually at heart - Your return will come in the form of a gift card more often than not. The plan and gift card mean you are locked into using the issuing retailer for your next technology purchase.
Heavier sales tax load - You may end up paying triple the sales tax by the time you upgrade. By paying the tax once when you buy the gadget, a second time when you return it and again when you use the gift card, you end up paying more sales taxes than you would otherwise.
Personal information may be at risk - While a buy-back program may include wiping personal data from a device, there is no way to verify that has been done once you hand over your product. Many electronic items such as a smart-phones, laptops and other mobile devices can hold a great deal of personal information. If this gets into the wrong hands, your contacts, emails, telephone numbers and other personal information could be compromised. Be sure to fully wipe out all personal data, especially if you enter long distance billing codes and credit card information in your portable devices.
These issues will not dissuade consumers who want to stay on the cutting edge of electronic technology. For some, the buy-back programs are worth every cent. The programs vary from one retailer to the next, so be sure to read the terms and conditions carefully, and ask whether you can have several days grace after purchase to consider a program before signing up.
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Founded in 1928, Connecticut BBB is an unbiased non-profit organization that sets and upholds high standards for fair and honest business behavior. For more advice on finding companies and businesses, start your search with trust at www.bbb.org.