Buyback programs are rarely worth it

If you ever bought a cell phone or TV only to discover a newer, better model soon after, you might be tempted by buyback programs from Best Buy, Walmart, and other retailers. They let you trade in a device for a preset percentage of its value toward a newer model.

But think twice. The programs are fairly expensive and measly in what they pay. If you buy a Nintendo 3DS gaming device for $250 at Best Buy, for example, coverage would cost $25 for 24 months, upping the pretax price to $275. If you take the 3DS back within six months, you'd get a Best Buy card for $125. But it drops to $50 after 18 months. If you returned the 3DS after 18 months, you'd have saved only $25. Other drawbacks:

• With Best Buy and Walmart, your payment is store credit. That could keep you from getting a better buy elsewhere.
• If you purchase a buyback plan for a cell phone, tablet computer, or other device with a wireless contract, you're still liable for early termination fees that can cost $350, and you won't get a discounted price for the new device.

Bottom line

Buyback deals can make sense if you're buying a device you know you'll soon replace. But selling it on eBay or Craigslist could net you more cash.

For more details, read Buyback programs for consumer electronics.