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Best Buy’s Buy Back Program

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The consumer retailer Best Buy has found a way to lock customers into tighter relationships. The company’s rewards program may no longer the attraction it once was, so the company is introducing a benefit that will encourage shoppers to come back to the store. It also encourages the product upgrade philosophy, something that cell phone service providers have taken advantage for years. Consumers increasingly want the latest versions of everything. It may have slowed during the recession, but in general, Americans are willing to spend their disposable income on things, particularly technology, that becomes outdated very quickly.

Like Verizon’s “New Every Two” discount, Best Buy wants customers to upgrade their equipment frequently. The 42-inch LCD 60Hz HTDV was state-of-the-art and perfectly reasonable when I purchased it, but technology improves are increasing speed and frequency. Leaving the size of the television out of the picture, 120Hz gained popularity soon after I purchased the set. Technology shifted from cold cathode fluorescent lamps to LED for the screen’s backlight, saving more energy and providing a slightly better picture. Now the new televisions have incorporated 3D technology and offer 240Hz for non-3D content. Televisions also now come with apps and connect to the internet to stream movies from Netflix without a separate device. (Yet no television seems to come with a decent pair of speakers.)

I don’t know anyone who upgrades major electronic equipment as often as they upgrade cellphones, but Best Buy’s new Buy Back Program created an incentive for their customers to “trade up” at least every four years for televisions and at least two years for other electronic equipment covered by the program: mobile phones, laptops, netbooks, and tablets. The program works by trading in the equipment you purchased for a credit valued at a certain percentage of your purchase price, and that percentage is based on a time window.

  • From one month to six months after your purchase, you can return the product for a 50% credit of the purchase price.
  • Up to twelve months, the credit is 40%.
  • Up to eighteen months, the credit is 30%.
  • Up to twenty-four months, the credit is 20%.
  • For televisions only, up to forty-eight months, the credit is 10%.

Furthermore, when you return the equipment and trade it in for the credit, Best Buy will judge its condition. It must be rated “good” or “fair” to receive the full credit; if the product is in “poor” condition, the credit will be reduced by 50%.

This program is not automatic. You pay a fee to take advantage of this offer, and it’s not clear what the fee is from the materials I’ve reviewed so far. Like an extended warranty plan, Best Buy is counting on a certain percentage of customers paying the fee to join the Buy Back Program for their purchase and never trading in the product.

This could be a good way for people who are already addicted to technology and know they are going to upgrade their equipment within a few years, but that addiction never pays off in the end. If you have enough disposable income, all you really need to know is the cost of the program and whether you can get more for your money by selling your old equipment yourself. The fee is an important missing piece of information. Don’t forget that Best Buy’s prices are often, but not always, higher than other prices for the same product from retailers like Amazon.com and other online electronics dealers.

Personally, I won’t be joining this program. While I have upgraded my phone every two to three years recently, I don’t see the need to do the same for other technology that’s covered under Best Buy’s Buy Back Program. I don’t think it’s a good idea for someone who is not in the habit of replacing their equipment to buy the newest technology to start down that path.

Photo: gothopotam

Updated June 13, 2011 and originally published February 3, 2011. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes, also known as Flexo, is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about him and follow Luke Landes on Twitter. View all articles by .

{ 19 comments… read them below or add one }

avatar Money Beagle

It seems rather silly to me. If it were free, it’d be a no-brainer, but the fact that there is a fee makes it a no-way. In two years, I might indeed find a TV I want better, but if the difference of what you get back versus finding it somewhere else is greater than 20% of your original purchase price, you probably wouldn’t use it anyways or would be forced into spending more than you could have elsewhere. From Best Buy’s perspective, it makes sense because it’s forcing, I mean, encouraging loyalty, something that I think many customers (myself included) have abandoned as competition from other stores and from online, have dropped them from my first choice when buying electronics.

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avatar shawna starr

what do they do with the merchandise after they buy it back

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avatar TakeitEZ ♦549 (Dime)

I think that this works for those lazy consumers who don’t want to take the time to research prices and tv specs in order to get the best deal. The average consumer just likes to go to one spot, point at what they like and buy it.

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avatar DonnaFreedman ♦65 (Newbie)

I agree with TakeitEZ: This encourages you to return to the same place vs. looking for a better deal elsewhere. Then again, consumers are often seduced by “We’re doing something just for YOU!” deals. Witness rent-to-own and payday loan companies, among others.

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avatar Ridwan

Is it just me, or do all of the percentage brackets look like a really bad deal? I’m almost positive you could get a better deal on almost any electronics by selling on Craigslist or eBay.

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avatar jim

I agree with Ridwan that you could probably do better just selling the items 2nd hand yourself. Course thats a marginal amount of work compared to just dumping it at Best Buy.

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avatar Ridwan ♦295 (Nickel)

Very true. I always underestimate just how lazy people can be. Fortunately, I think anyone who cares enough about their money to read a blog like this wouldn’t fall for Best Buy’s college bookstore-style buyback prices.

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avatar krantcents

Interesting marketing move. I wouldn’t join either, the buy back percent is pretty low.

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avatar gotr31 ♦224 (Cent)

This program sounds ridiculous! It doesn’t sound like you would get much back and then having to pay a fee on top of it. Also, the idea that this type of program even exsists is pretty sad. How wasteful to replace something just because there is a newer, prettier, shinier model.

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avatar eric ♦1,549 (Half-Dollar)

I’m a bit of an anti BB person…their prices are always super expensive compared to online. Plus, with Amazon free 2-day shipping, I can get electronic stuff quick.

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avatar faithfueledbennetts ♦264 (Nickel)

This seems like a nice concept. However I d agree that they do not always have the lowest price to begin with. I make purchases through online retailers who offer a better rate to begin with. But, for those who want to personally go into a store, buy something and walk out with it, this could be great. I’m sure it will heighten their consumer loyalty too as planned.

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avatar skylog ♦368 (Nickel)

i also am somewhat of an anti BB person. unless they are having a specific sale, their prices are often beat by other retailers. that said, i do not think this program is worth it, for quite a few reasons. it seems one could do better simply selling the items themselves, especially when you look at the time frames/percentages.

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avatar PJ

This buy-back program is currently free. I wouldn’t pay a dime for it, but for free I can decide later whether it makes sense for me to make use of it.

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avatar moneymatters ♦357 (Nickel)

To me it doesn’t sound like that great of a deal. If people would just take the time to sell their own TVs/etc they could most certainly get a lot more for them than if they sold them back to Best Buy’s buyback program.

For example, a while back I decided to sell an old DVD recorder. It worked fine but i just never used it and wanted to buy a Xbox instead. I sold it on craigslist for almost 80% of what I bought it for.

Sell it yourself! (unless you’re lazy or too busy) :)

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avatar Brian

It might not be bad for cellphones, because the percentage you get back is off the full retail price at the time of purchase. It’s not off the price you actually pay with a two year contract. So for example the HTC Shift which was on sale for $99 a few days ago, would in 6 months, get you 50% of the full retail $549.99. That means you’d get $150 more back than you paid for your phone. Of course this means you used your two year renewal credit, so you’ll end up having to pay retail for a new phone or buying another phone off Ebay.

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avatar Brian

Oops, I mean you’d get back $175 more. 50% off $550 is $275.

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avatar Manollo

This program is such a rip off. Why should I pay 39.99 usd – and that is starting – for something were I get ripped off later on anyways. Who would buy a TV for 2000 usd and get 1000 usd back after 3 months? Another reason to avoid BB.

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avatar Ceecee ♦53 (Newbie)

I wouldn’t use this. This is only for people who must have the latest thing. I use things til they fall to pieces.

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avatar Lance

I was of the same mind as most of the comments regarding TV, etc. But for cell phones it should prove to be worth it in the long run. Here’s an example:

The normal cost of the Buy Back program is $60 for a smartphone. If you subscribe to their warranty service for $10/month, that cost is reduced by 50% to $30. You can cancel the warranty service at any time after the first month. So for $40 you get one month of warranty and are part of the Buy Back program.

In 18-24 months, the Buy Back is 20% of the retail value which was normally around $600 for smartphones ($500-$700 typically). So you get $120 in buy back money. In 20-24 months you are eligible to upgrade your cell phone with most carriers and get a renewal discount price for a new cell phone, for example right now the 2yr renewal cost on a 16GB iPhone 4 with Verizon is $200. You would then turn in your two year old phone, get $120, which is in reality a net $80 because it cost you $40 upfront, off that new phone.

This does lock you into getting your next phone upgrade at BB, which is their point, or if you don’t do that they just got $40 off you for nothing, but if you do go back, you would get a net $80 off you next phone in 2 years. Sounds appealing to me.

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