Weary of the short shelf life of many consumer electronics items, which always seem to be rapidly replaced by updated models with the latest, greatest features? If so, you might be interested in retailer buyback programs that give you replacement insurance for obsolescence.
Two of the biggest retailers to offer a buyback program are Best Buy and Walmart, with their Buy Back Program and TechForward Buyback Plan, respectively. (As of mid-April, Target was offering a limited-time buyback program for the original Apple iPad at some trade-in e-stores. It wasn't offering any other buyback programs at that time.)
Purchasing buyback coverage allows you to exchange the device for a preset percentage of its value toward the purchase of a newer model, assuming it's in at least good condition. The programs don't replace extended warranties. Damage your camcorder, cell phone, or laptop, and you'll get less or even nothing for it when you take it back to the retailer. (Find out where Best Buy, Walmart, and other retailers stand in our Ratings of the best places to buy consumer electronics.)
Buyback programs offer convenience, promising to cushion the cost of replacing items fairly with less hassle than, say, selling the old one on eBay or Craigslist. But they don't offer the best value, even if you typically swap out your gadgets often. In a nutshell, the programs are fairly expensive and fairly measly in what they pay to buy your item back.
One drawback to the Best Buy and Walmart buyback programs is that you must accept any payments as store credit. That might discourage you from shopping at other stores that might offer lower prices.
Let's say you buy a Nintendo 3DS portable gaming device, which retails for $249 at Best Buy. Buyback coverage would cost you $24.99 for 24 months, bringing the pretax price for your 3DS to $273.99.
If you bring back the 3DS within the first six months, you'll get a Best Buy card for $124.50, but that figure drops to $49.80 after a year and a half. So if you return the 3DS after 18 months, in the end you will have paid $224.19 for it. Were you to do the work to sell the 3DS on eBay instead, you'd probably make more of a profit, even after eBay fees.
Also, if you buy a buyback plan for a cell phone, tablet computer, or other device with a wireless contract, you are still responsible for early-termination fees, which can run as high as $350. Nor will the program help you get the replacement at a discounted price from the provider; you'll pay the full cost for the new device, which is likely to be hundreds more than you paid for the contracted one in exchange for the contract commitment.
Should you consider purchasing a buyback program? Perhaps. The programs make the most sense if you're buying a device you know you'll replace within months. For example, perhaps you just bought an iPhone 4 but as an early adopter you'll get the next-generation iPhone, which will almost certainly be introduced in June. A buyback program might also make sense if the convenience of disposing of older gear outweighs cost considerations.
Here's how the buyback and trade-in programs work at Best Buy and Walmart:
The Best Buy plan costs a hefty $69.99 to $99.99 for most items, though the price can dip as low as $14.99 for a Nintendo DSi or as high as $299.99 for any HDTV that costs $2,500 to $4,999. When you're ready for a new model, you bring the old one back to the store. The device must be in normal working order, with all accessories and original packaging. The store will evaluate your item and issue a gift card for credit toward a new item.
The retailer offers 50 percent of a gadget's value up to six months after purchase. That drops to 40 percent for something that's six to 12 months old, 30 percent for 12 to 18 months, and 20 percent for an 18-to-24-month-old item. After that, the program no longer applies to most items except for TVs. You can get 10 percent back for a TV that's two to four years old.
As we recently reported, in most cases the Best Buy Buy Back Program is not a good deal. For example, Best Buy charges $69.99 for the buyback plan on a $259.99 Asus Eee PC netbook; that's more than 25 percent of the purchase price. Paying extra at the retail counter is essentially free money up front for Best Buy, and could also make you feel like you need to upgrade even if your gadget is working perfectly fine a year later.
Walmart sells a series of TechForward Buyback programs that vary by device. They range from $19.88 (for GPS navigators and digital cameras) to $99.88 for larger HDTVs that cost from $1,000 to $2,000. As with Best Buy, you have to select the correct program and purchase it up front with your new gadget.
Walmart's program also covers smaller TVs, LCD monitors, Blu-ray players, camcorders, cell phones, and laptop, desktop, and tablet computers. The buyback amounts are the same as Best Buy's, except that there's no extension for TVs that are two to four years old.
If a buyback program doesn't interest you, consider a trade-in program.