Nothing in life is free. Didn’t your parents always tell you that? If a deal seems to good to be true, I bet they told you to look at it very closely as well. It is an unfortunate reality that when you’re dealing with any sort of transaction that involves money or gain, you do need to pay attention or risk coming out on the short end of the stick.
So, why should gadget buy back programs be any different than say rebate programs or other incentive programs that on the surface look mighty tempting. They certainly promise to save you some dough, but do they really? Of course all of these types of programs are designed to catch you right at the moment, when you’re ready to whip our your credit card, your adrenalin is running, and you can’t wait to get home and unbox your new shiny object.
Buy back programs usually work like this. You pay a fee (the amount is pegged to the cost of the gadget you’re buying). That fee on the surface entitles you to get back a portion of the purchase when you head in to buy the latest and greatest a year later. In store programs like Best Buy, of course mean you have to do all the purchasing and returning there, although there are independent programs out there. When you bring in the old gadget you get a gift card to use towards the next purchase.
Red Tape Chronicles has a good read that you might want to file away when it comes to gadget buy back programs. In this crazy world mobile gadget world where two versions ahead of the devices in the store are all the rage, there’s definitely a psychology working for the folks who create these kind of programs. The article points out that a few things that you might want to know before plopping down that extra cash at check out to hopefully insure you can get the next version a little cheaper.
A couple of interesting things to note.
- You do have to save your original receipts, all of the accessories that may have come with the original package, and in some cases the packaging. Oh, and the value of what you receive back for the next purchase may be reduced by any wear and tear on the original device.
- You may end up paying triple sales taxes over the course of the transaction. That varies by state of course.
- At least with the Best Buy program it seems really confusing if you’re using this program for a smartphone purchase. Here’s a quote:
Best Buy executive George Sherman recently said that buy-back programs were most popular among cell phone buyers. It’s really hard to make the numbers make sense with most phone purchases, because they come with two-year service obligations. Fulfill that two-year contract, and you can’t get a dime back from the insurance. Return the phone early, and any buy-back payment you receive will be reduced by the early termination fee you’d have to pay. Again, this is calculus that most consumers shouldn’t even attempt.
I’m not saying this kind of program doesn’t work for some. Obviously it works for those who have created them as in the Best Buy program they are extending them to cover more types of merchandise. But as with any kind of insurance, or any kind of purchase, it is always a good thing to look before you leap.