Over the years, I’ve gone to Best Buy several times and upgraded my cell phone and traded in the old model. I’ve also traded in a Kindle Fire there.
So, what happens to all those traded gadgets? What makes it worth Best Buy’s while to collect them and pay out giftcards, discounts, or whatever?
They may be sold for use in poorer areas of the world where a working phone that’s 2 years old can be a life saver.
Some are also donated to people who are homeless, or are escaping domestic violence. Even the oldest phone can call 911 as long as it’s charged.
I find it hard to believe that Best Buy, Target, Walmart, and others have set up entire Mobile Phone departments just to collect phones for the needy. While all of those stores have philanthropic arms, this seems like an awful lot of effort in floor space, staffing, inventory management, etc. Surely there is a profit motive here as well (not that there’s anything wrong with that).
Tax write-off?
And some good PR and marketing fodder?
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I think the operative word In GaryM’s post was “sold”. Some may be donated to the needy, but I imagine most are sold for a profit to people that can’t afford whatever the latest is.
The other factor is probably that offering a giftcard/discount/whatever for the old phone is the same as offering a coupon for the new one. Even if they throw the old phone away immediately, there’s still a profit because you bought the new phone.
I suspect they get paid for them by the carriers, who have a vested interest in there being fewer used cell phones floating around so that they can sell more new ones.
Best Buy has two programs: The one that you describe that gives discounts if you trade in your old working phone and they have a program where they accept most e-waste for recycling from the public, no purchase necessary.
The reason for the first one is clear: Encourage people who still have a perfectly good working device to buy a new one now instead of waiting for it to break.
The second one is less clear. Best Buy’s general recycling program was being held up several years ago as a shining example of “green commerce.” They were actually making money turning over the junk to recyclers as explained in this 2012 article.
But since then, things have gone sour. Commodity prices have plummeted and Best Buy now is losing money on recycling.
Or to put it another way, its price discrimination. This group of potential buyers is less desperate for a new phone, and therefore less willing to spend a lot of money on a new phone. By selling to this group at a lower price while selling at a higher price to everyone else, they maximize their profit.
Not BestBuy, but when I upgraded my iPhone from the 5c to the 6splus (a move I am very happy about) Verizon initially offered my $99 for my old phone. When I declined their offer, they upped the ante to $200 the next day, which I accepted.
In this case the phones are reconditioned and sold.
Yes.
This seems like a really obvious question.
Why aren’t you confused about what the new car dealers do with all the trade-ins?